Abu Dhabi's First Gulf Bank made its debut in the Kangaroo bond market with a five-year bond of A$250 million. The A2/A+ rated lender mandated ANZ, HSBC and Nomura as arrangers on the offer.
The 5.0 percent April 1 2019s priced at 98.945 for a yield of 5.2425 percent, in line with the guidance of asset swaps plus 155 basis point area and 177 bps over March 2019 Australian Commonwealth Government bonds.
This is only the fourth Kangaroo bond from a Middle Eastern bank, and comes hot on the heels of a March 12 new issue from Aa3/AA-/AA- rated National Bank of Abu Dhabi.
NBAD raised A$400 million from a new 4.75 percent, five-year Kangaroo, priced at 99.375 to yield 4.8925 percent, 125 bps over asset swaps. This followed the issuer's A$300 million Kangaroo debut on Feb. 28, 2013 with another five-year, priced 175 bps wide of asset swaps.
A banker close to NBAD's most recent deal said at the time that other Middle East issuers were eyeing the Aussie dollar market to take advantage of arbitrage opportunities.
"In the next few weeks, you may see more regional issuers tap the Aussie dollar market. It is proving to be an attractive proposition because currency movements allow you to achieve a better rate than in U.S. dollars," he said.
The only previous Kangaroo bond from the Middle East was in November 2006, when Emirates Bank International, rated A/A1/A, issued A$250 million in fixed- and floating-rate three-year notes.