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First Gulf Bank (FGB), one of the leading banks in the UAE, has concluded the issuance of 250 million Australian Dollars (USD 228.35 million) for its debut ‘Kangaroo’ 5-year bond. The transaction took place on March 24th, registering a final price for the bonds at 155 basis points above interpolated midswaps (bps). The bonds are set to mature on April 1, 2019.
The bonds have a long-term rating of A+ by Fitch and A2 by Moody’s, considered for both and are listed with coupons at a fixed interest rate of 5% p.a.
FGB’s bonds have received highly positive endorsement from global investors with a total demand of 375 million Australian Dollars. The book was driven by broad demand across many regions, with final allocations of 41% to domestic Australian investors, 31% to Asian investors and 29% to European investors. In terms of allocation by investor type, 55% of bonds went to Institutional investors and Fund Managers, 28% to Banks and 16% to Private Banks.
Commenting on the transaction, André Sayegh, CEO of First Gulf Bank, said: “Our first issuance in the Australian market has proven to be very successful, with a high level of interest displayed by international investors. We are very pleased with the feedback received, and with our entry into a new market, which complements our strategy of expanding our operations internationally and of diversifying our sources of funding. We are also proud of having achieved our lowest pricing on a public issuance.”
The transaction was jointly led by ANZ, HSBC and Nomura. Proceeds from these bonds will be used by FGB for general funding purposes.
In November 2013, FGB issued USD 500 million long 5-year bonds under its USD 3.5 billion Euro Medium Term Note (EMTN) programme. The transaction was well received by international investors with a total subscribed value of USD 1.4 billion and registered a final price for the bonds at 180 basis points above interpolated midswaps (bps). The bonds are set to mature in January 2019.
Futhermore, in October 2012, FGB received an overwhelming endorsement from investors for its USD 650 million 5-year EMTN bonds, at a total subscribed value of more than USD 2.7 billion.
In addition, the bank has also had two highly successful issuances of Sukuk (Islamic bonds): USD 650 million in July 2011 and USD 500 million in January 2012. Both were oversubscribed many times over.
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