First Gulf Bank (FGB), has received an overwhelming endorsement from its investors via a 4 times oversubscription of its $650 million 5-year Euro Medium Term Note Programme (EMTN) conventional bonds issuance.
The EMTN bonds has a Long-term rating ‘A+’ by Fitch and ‘A2’ by Moody’s. The FGB bonds transaction commenced on Oct.1, 2012 and ended on the same day at a total subscribed value over $2.7 billion.
Lead jointly by Cirtigroup, Deutsche Bank, HSBC, NBAD and Standard Chartered Bank as Joint Lead Managers and Joint Book runners, the transaction set the final price for the five-year bonds at 210 basis points above midswaps. The EMTN Bonds are listed in London and retain a fixed interest rate of 2.862 per cent per annum.
Proceeds from these bonds, which were issued under FGB’s $3.5 billion EMTN Programme (EMTN) and were recently updated and approved by the United Kingdom Listing Authority (UKLA), are to be used by the bank for general corporate purposes, to diversify the funding base.
Commenting on the success of the transaction, Andre’ Sayegh, CEO of First Gulf Bank said: “Once again, investors have shown their confidence in FGB and our ability to provide sustainable returns to our investors and shareholders, by maintaining a strong and liquid balance sheet. This confidence is a direct result of the bank’s solid foundation and continuous endorsement of our stakeholders to our business strategies.”
The breakup of sales was allocated to different locations, where 57 per cent of investors were Middle East and North Africa based, 27 per cent were from Europe, 13 per cent from Asian markets, and 3 per cent from the United States. The transaction was divided between Banks (40 per cent), Fund Managers (36 per cent), Private Banks (15 per cent) and Central Banks (9 per cent).
In November 2009, FGB rose under this programme $500, million senior unsecured three-year notes.
The bank has also issued in January 2011 under the same programme five-year 200 million Swiss franc ($206 million) notes
Under its FGB Sukuk Company Limited $3.5 billion Trust Certificate Issuance Programme, the bank had two very successful issuances of Sukuk (Islamic bonds), USD 650 million in July 2011 and $500 million in January 2012. Both were oversubscribed by many folds.