Debt capital markets: Gulf bonds enjoy strong demand
Investors are offered first subordinated bond issue by a Middle Eastern financial institution, lead managed by Deutsche Bank and UBS.
Commercial Bank has achieved
Gulf banks have been busy in the debt capital markets. First off the blocks was Bahrain’s Gulf International Bank issued a $400 million 10-year non-call five subordinated floating-rate note on the London Stock Exchange. Then Saudi Arabia’s National Commercial Bank (NCB) launched a $700 million, five-year bond. Gulf International’s FRN, which has been rated Baa1 by Moody’s, BBB+ by Standard and Poor’s (S&P) and BBB by Fitch, was lead managed by Barclays Capital and Citigroup.
The bank described the issue as a “groundbreaking transaction representing the very first subordinated bond issue by a Middle Eastern financial institution.” It has a coupon of 70 basis points over three-month Libor.
According to GIB’s chief executive officer, Khaled Al Fayez, the issue size was increased from $300 million after “exceptionally high demand from local and international investors”.
NCB’s bond was priced at 35bp over three-month Libor. The issue was lead managed by Deutsche Bank and UBS.
Neil Shuttleworth of Deutsche Bank’s emerging markets syndicate team says that strong demand led NCB to increase the issue size from the original target of $500 million.