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GIB's key Saudi riyal bond issue a success.

MANAMA: Bahrain-based Gulf International Bank (GIB) has successfully closed its nearly $1 billion Saudi riyal-denominated bond issue, which was launched in Saudi Arabia through the bank's Riyadh branch.

The five year bond issue has been priced at 110 basis points over Saudi Interbank Offer Rate (Sibor).

The pricing was finalised at the lowest end of the original price indication of 110 to 120 basis points, demonstrating the overwhelming demand and success of the transaction.

GIB's Riyadh branch appointed GIB Financial Services (GIBFS) as the mandated lead arranger of the bond issue.

Samba Capital and Investment Management Company, Riyad Capital, Calyon Saudi Fransi Limited, and GIBFS were mandated as joint book runners and joint lead managers of the bond transaction.

The issue was offered through a private placement to sophisticated investors.

The objective of the bond issue is to further enhance and strengthen GIB's funding base and to extend the maturity profile of its liabilities.

Through this and previous bond issues, GIB has successfully reduced its previous reliance on short term wholesale deposits, thereby more closely aligning the maturity profile of its assets and liabilities.

A wide range of banks, trading and industrial companies and governmental institutions subscribed for the bond issue.

The allocation process was finalised yesterday while the settlement will be completed next week.

Although the issue was originally targeted for 3bn riyals ($880.6 million), the final issue size was increased to 3.5bn riyals to satisfy the substantial demand from investors. The order book was closed with orders totalling 6.3bn riyals.

"We are delighted with the outcome of this bond issue," said GIB chief executive officer, Dr Yahya A Alyahya.

"The demand from a diverse group of highly respected institutional investors reflects not only the market's strong confidence in GIB, but also manifests the dynamism of Saudi Arabia's economy and growing capital markets," he added.

Last November, GIB successfully completed a 2bn riyal three-year bond issue in Saudi Arabia.

The issue was oversubscribed by more than three times.

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Apr 22, 2010
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