Abu Dhabi-listed lender plans benchmark-sized dollar-denominated bond imminently
Abu Dhabi-listed First Gulf Bank plans to issue a five-year, benchmark-sized dollar-denominated bond imminently, arranging banks said on Monday.
Early price talk was seen at 220 basis points over midswaps but market sources expect this to tighten at launch, although this will depend on demand for the deal.
FGB's existing 2017 maturity - a US$500m Islamic bond, or sukuk, was yielding about 2.7 percent on Monday, according to Thomson Reuters data, at a z-spread of about 207.6 basis points.
The z-spread is a pricing tool which calculates the number of basis points that need to be added to a zero-coupon yield curve to make the bond's discounted cash flows equal the bond's present value
FGB plans to issue the new bond under its US$3.5bn euro medium term notes programme.
Benchmark-sized is understood to mean at least US$500m. Citi, National Bank of Abu Dhabi, HSBC, Standard Chartered and Deutsche Bank are arranging the deal.
Reuters reported last week that the lender, the second-largest by market value in the UAE, was eyeing a new bond sale.