First Gulf Bank delays bond offer on higher rates

First Gulf doesn’t need to borrow funds immediately and will monitor market conditions before selling debt
First Gulf Bank had a Q3 profit of $231.2m, topping the median $214.9m profit estimate of eight analysts, according to data compiled by Bloomberg. (ITP Images)
By Bloomberg
Thu 11 Nov 2010 05:36 PM

First Gulf Bank, the third- largest lender in Abu Dhabi, will delay a plan to sell bonds because interest rates aren’t favourable, said a spokesman at the bank.

First Gulf doesn’t need to borrow funds immediately and will monitor market conditions before selling debt, said the spokesman who declined to be identified, citing company policy.

An increase in the US mid-swap rate has made pricing expensive for the lender, he said. The five-year swap rate rose to 1.5135 percent today from 1.3595 percent on November 5, according to prices compiled by Bloomberg.

Banks in the Persian Gulf have returned to the debt markets after Dubai World reached an agreement with creditors in September to change terms on $24.9bn of debt, giving investors incentive to buy higher-yielding securities.

Qatar National Bank SAQ, the country’s biggest bank by assets, raised $1.5bn and Saudi British Bank, a lender 40 percent owned by HSBC Holdings Plc, $600m from bond sales.

First Gulf Bank had a third-quarter profit of AED849m ($231.2m ), topping the median AED789.5m profit estimate of eight analysts, according to data compiled by Bloomberg. (Bloomberg)

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