Abu Dhabi, January 12, 2011: First Gulf Bank PJSC, (FGB), the leading financial partner of choice in the UAE, has received excellent investor endorsement through a 2.8 times oversubscription of its USD 500 million Sukuk (Islamic bonds) issuance. The FGB Sukuk transaction commenced yesterday, on January 12, 2012 and ended on the same day at a total value of USD 1.4 bn.
Lead by FGB, Citi, HSBC, NBAD and Standard Chartered banks jointly, the transaction set the final price for the five-year Sukuk at 287.5 basis points above midswaps. Rated as A2 (Stable) by Moody’s and A+ (Stable) by Fitch, the Regulated S Bonds are listed in London and retain a fixed profit rate of 4.046% p.a. Proceeds from the Sukuk are to be used for general corporate purposes.
Commenting on the success of the transaction, Andre’ Sayegh, CEO of First Gulf Bank said: “The positive response we have received for this transaction clearly reflects the trust that investors have in our bank and in our strong fundamentals and ability to provide sustainable returns to our shareholders. This is our second Sukuk transaction, and we have witnessed overwhelming responses in both times from investors in the Middle East, Europe and Asia. Our business strategy and global expansion activities have reaffirmed people’s trust in our bank and global investors continue to endorse our offerings.”
“Carried out alongside our joint lead managers, the transaction carried the total subscription value of USD 1.4 bn. The proceeds will be used for general corporate purposes and to enhance our services and continue to diversify our funding base and our offerings,” Sayegh added.
The breakup of sales was allocated to different locations, where 69% of investors were Middle East based, 15 % were from Europe, and 16% from Asian markets. The transaction was divided between Commercial and Investment Banks (72%), Fund Managers (18%), Private Banks (7%) and Insurance and pensions (3%).