Abu Dhabi-listed First Gulf Bank launched a $650 million five-year bond on Monday, the first major Gulf borrower to issue since the traditional summer lull, taking advantage of healthy investor demand for regional debt.
The bond launched at a spread of 210 basis points over midswaps, at the tighter end of final guidance released earlier in the day, indicating appetite for the lender's new issue was strong.
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Order books had approached $3 billion ahead of launch, a banker familiar with the deal said, allowing FGB to issue $650 million. The borrower had indicated it would look to raise at least $500 million from the bond sale, which it said would be used for general funding purposes.
FGB may soon be joined by another regional bank, Qatar Islamic Bank , which is expected to issue a sukuk this week, following investor meetings.
FGB's existing 2017 maturity - a $500 million Islamic bond, or sukuk, - was yielding about 2.6 percent on Monday afternoon, Thomson Reuters data showed, at a z-spread of about 202.5 basis points.
The z-spread is a pricing tool which calculates the number of basis points that need to be added to a zero-coupon yield curve to make the bond's discounted cash flows equal the bond's present value.
Reuters reported last week that the lender, the second-largest by market value in the United Arab Emirates, was eyeing a new bond sale.
Citi , National Bank of Abu Dhabi , HSBC , Standard Chartered and Deutsche Bank were joint lead arrangers on FGB's deal.
(Reporting by Rachna Uppal; Editing by David French and Helen Massy-Beresford)