GIB raises SAR2bn bond

GIB raises SAR2bn bond

Published: May 20, 2014

Bahraini bank makes foray into Saudi market. 

Bahrain’s Gulf International Bank (GIB) has issued SAR2bn (US$534mn)-worth of bonds. The five-year paper was priced at 72.5 basis points above three-month SAIBOR, the Saudi interbank lending rate, which is at the tight end of the guidance range.

The order book was 1.7-times oversubscribed, reaching SAR3.4bn of orders, with all investors coming from within Saudi Arabia. GIB Capital, NCB Capital, Samba Capital and Saudi Fransi Capital were joint lead managers and bookrunners.

Yahya Alyahya, GIB's chief executive officer, said: '”This bond issue confirms GIB's commitment to diversify its funding sources and utilise innovative funding structures to achieve the lowest possible cost of funding for the bank.”

GIB’s last bond issuance was in December 2012 when it tapped the international markets to raise US$500mn with a coupon of 2.375%. The bank’s last SAR issuance was in June 2010, when it raised SAR3.5bn of 5-year debt priced at SAIBOR plus 100 basis points.