First Gulf Bank issues $500m 5-year bonds

UAE-based First Gulf Bank (FGB)  has issued $500 million 5-year bonds under its $3.5 billion Euro Medium Term Note (EMTN) programme. The transaction took place on November 5, registering a final price for the bonds at 180 basis points above interpolated midswaps (bps). The bonds are set to mature in 2019.

 The bonds have a long-term rating of 'A+' by Fitch and ‘A2' by Moody's, with a stable outlook considered for both. The EMTN Bonds are listed in London with coupons at a fixed interest rate of 3.25% per annum. The transaction set the final price for the five-year bonds at 180 basis points above interpolated midswaps (bps), lower than previous spreads of 287.5bp and 210bp for FGB's January 2012 Sukuk issuance and its October 2012 EMTN transactions respectively.

 FGB's bonds have received positive endorsement from its investors, who registered a total oversubscription of 2.8 times, accumulating an order-book of $1.4billion.  The book was driven by broad demand across many regions, with allocations of 59 per cent to Middle East investors, 34 per cent to European investors and seven per cent to Asian investors. In terms of allocation by investor type, 51 per cent of the transaction was allocated to fund managers, 30 per cent to banks, and 17 per cent to private banks.

Commenting on the transaction, Andre Sayegh, CEO of First Gulf Bank, said: "Once again, the market has shown a high level of confidence in First Gulf Bank. The final price of the transaction is the lowest we have achieved to date for our bond issuances, which is due to the bank's consistently strong financial performance, expansion activities and solid ratings, which have led to deeper global trust in our operations."

The transaction was jointly led by Bank of America Merrill Lynch, Citigroup, Deutsche Bank and HSBC Holdings. Proceeds from these bonds will be used by FGB to contribute towards its medium term funding plan.

 




 

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