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Wed 18 Nov 2009 11:04 AM

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UAE's First Gulf Bank sets guidance for $500m bond

Guidance set at 250 bps-275 bps over midswaps; deal to close on Thursday.

First Gulf Bank

has set price guidance for a 3-year benchmark dollar bond at 250-275 basis points over midswaps, a banker close to the transaction said on Wednesday.

"The price guidance is 275 ... (which) is still on the higher side. It may come to 250," said the banker, who declined to be identified.

The size of bond, to be used for expansion and general corporate purposes, would be about $500 million and the deal would close on Thursday, he added.

The bond is the latest in a flurry of issues from the Gulf Arab region. On Tuesday the Qatari government raised $7 billion from a three-tranche bond as demand rises for high-rating emerging market debt.

"The response was very good. Investors liked the credit story of
First Gulf Bank

and Abu Dhabi, but because of an excess supply and being the end of the season investors are allocating less," the banker said.

The issue is the first under the bank's $3.5bn euro medium-term note programme approved in 2007.

Citi, Deutsche Bank, HSBC and BNP Paribas are arranging the deal. (Reuters)

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