FGB raises $650m from 5-year bond at 200bps

ABU DHABI - First Gulf Bank (FGB) raised $650 million from the sale of five-year Islamic bonds, or sukuk, on Tuesday, in a significantly oversubscribed deal that benefited from solid global demand for Sharia-compliant paper.

By (Reuters)

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Published: Wed 27 Jul 2011, 11:08 PM

Last updated: Tue 7 Apr 2015, 4:39 AM

The sukuk priced at 200 basis points over five-year midswaps, in line with earlier guidance, offering a profit rate — equivalent to a coupon — of 3.797 per cent, two sources involved in the deal said.

One of the sources, who has direct knowledge of the transaction, said total subscriptions were around $3.8 billion and the deal attracted more than 200 orders. A regional trader said FGB’s sukuk was already trading 1 point higher soon after pricing, at 1310 GMT. Earlier, two market sources said that the bank, the UAE’s second-biggest lender by market value, had cancelled the final leg of roadshows in Switzerland on Tuesday.

Investor appetite for Islamic debt from the region has proved resilient despite market volatility.

Issues from entities such as Sharjah Islamic Bank, which launched a $400 million sukuk in May, and HSBC Middle East, with a $500 million offering the same month, have already set a positive tone with both issues well oversubscribed.

Citi, Standard Chartered and HSBC were mandated bookrunners for the FGB issue, while Dubai Islamic Bank and National Bank of Abu Dhabi were appointed senior co-managers. Three other UAE-based Islamic banks were appointed co-managers.

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