Gulf International Bank’s (GIB) latest bond issue met with robust demand as the bank on 18th January, 2017 successfully priced its US$500 million long 5-year bond issuance.
The order book peaked at over US$1.2 billion, allowing price guidance to be tightened to achieve a final pricing of 170 basis points over mid-swaps, 10 basis points less than the indicated initial price thoughts.
The order book was well diversified by both geography and investor type with investors comprising banks, fund managers, insurance companies, private banks and other investors from MENA, Europe and Asia. The final investor allocations were 57 per cent for MENA, 22 per cent for Europe, and 21 per cent for Asia, with 54 per cent of allocations going to banks, 32 per cent to fund managers, and 14 per cent to the others.
H.E. Jammaz Bin Abdullah Al-Suhaimi, GIB’s Chairman, commented on the issuance: “We are very pleased with the successful closing of this bond issue at this attractive pricing level. Strong demand by a great number of highly esteemed entities from the international investor community reflects the market’s confidence in GIB’s experience and strong financial position.”
This bond issuance was the first non-sovereign bond offering out of CEEMEA in 2017, establishing a US$ benchmark for global investors to follow in the MENA region, particularly for quasi-sovereign Saudi Arabian risk. GIB were able to position themselves with investors by following a methodology of pricing against the newly established Saudi sovereign yield curve.
Mr. Abdulaziz Al-Helaissi, GIB’s Chief Executive Officer, commented: “This bond issue reaffirms GIB’s commitment to expand its funding sources and employ a variety of funding structures to achieve an equitable cost of funding for the bank.”
GIB Capital LLC and JP Morgan acted as joint global coordinators and Citigroup, GIB Capital, HSBC, JP Morgan, Mizuho, National Bank of Abu Dhabi and Standard Chartered Bank were joint bookrunners for the offering.
GIB is owned by the governments of the six Gulf Cooperation Council countries, with Saudi Arabia’s Public Investment Fund being the primary shareholder.
GIB, the Gulf’s international bank, helps its clients thrive by working together to realise ambitions. GIB aims to be the preferred financial services partner, delivering bespoke banking solutions to a wide customer base in the region and beyond. This includes corporate banking, asset management, debt and equity capital market services, financial advisory services, mergers and acquisitions, and the world’s first Shariah compliant digital retail banking service, meem by GIB.
GIB Capital LLC is the investment banking arm of GIB, offering innovative solutions in the fields of bond and Sukuk issuance, financial restructuring, private placements, private sale, IPOs, underwriting equity and debt, as well as mergers and acquisitions.
In addition to its main subsidiaries, London-based GIB (UK) Ltd., and Riyadh-based GIB Capital LLC, it has branches in London, New York, Abu Dhabi, Dhahran, Riyadh and Jeddah with a representative office in Dubai.