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First Gulf Bank's ¥10 billion ?debut bond sold

June 27, 2014

First Gulf Bank, FGB, on Thursday announced that it sold a debut 10 billion ($98.2 million) bond as part of its strategy to diversify funding sources and explore new markets.

The five-year bond carried an annual coupon of 0.863 per cent and is part of the Abu Dhabi-based bank's $1 billion Tokyo Pro-Bond Market Programme registered by the bank on June 11, the bank informed in a statement. HSBC Bank plc and Mizuho International plc led the transaction, which took placed on June 23, it added.

FGB is the first organisation from the Middle East to issue under the new Tokyo Pro-Bond Market. The issuance quickly follows the bank's first Australian market transaction, which took place earlier this year when FGB concluded its five-year 'Kangaroo' bond issuance.

AndrÉ Sayegh, CEO of FGB, said: "This debut issuance on the new Tokyo Pro-Bond Market is a key part of FGB's ongoing strategy to diversify our sources of funding and expand into new markets. It complements our inaugural 'Kangaroo' 5-year bond issuance earlier this year perfectly and has been positively received by investors."

He added: "We've already made in-roads into Asia Pacific with our established, dedicated FGB Singapore branch and the conclusion of a Negotiable Certificate of Deposit, or NCD, programme which allows the bank to raise funds across a diversified base when required and to reach out to a wider range of institutional investors. The new Tokyo bond issuance increases our visibility in the APAC market and builds on our profile within the region."

In November 2013, FGB issued $500 million five-year bonds under its $3.5 billion EMTN programme. The transaction was well-received by international investors with a total subscribed value of $1.4 billion and registered a final price for the bonds at 180 basis points above interpolated midswaps (bps). The bonds are set to mature in January 2019. Furthermore, in October 2012, FGB received an overwhelming endorsement from investors for its $650 million five-year EMTN bonds, at a total subscribed value of more than $2.7 billion.

The bank has also had two highly successful issuances of sukuk (Islamic bonds): $650 million in July 2011 and $500 million in January 2012, which were both oversubscribed many times over.

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Source: Khaleej Times (United Arab Emirates)

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