GULF INTERNATIONAL BANK RAISES US$500 MILLION THROUGH A SUCCESSFUL, OVERSUBSCRIBED BOND ISSUE

On Tuesday, 4th December 2012, Gulf International Bank (GIB), rated A (Fitch)/ A3 (Moody’s) / BBB+ (S&P), announced the successful completion of its senior unsecured US$ 500 million 5-year debut issue under its US$ 4 billion Euro Medium Term Note Programme. The notes were issued at a spread of US$ 5-year mid-swap plus 165 basis points with a coupon rate of 2.375%.

This highly successful Reg S transaction achieved one of the lowest coupons for a US$ 5-year senior unsecured transaction by a bank in the MENA region, clearly reflecting investors’ high confidence in GIB’s financial strength and credit story.

Initial price guidance was communicated at 8:00 am London time on Tuesday 4th December 2012 to the market at a range of mid-swap +165-175 basis points, which resulted in strong momentum allowing GIB to execute intra-day and to price at the low end of the price guidance. The order book was 3.5 times oversubscribed and comprised around 90 investors.

The success of GIB’s transaction was underpinned by the international marketing strategy undertaken in the Middle East, Asia and Europe, with two teams headed by GIB’s senior management covering all regions in a short timeframe. The government of Saudi Arabia’s 97.2% shareholding in GIB appealed to a diverse and high-quality investor base.

Dr. Yahya Alyahya, GIB’s Chief Executive Officer, commented: “We are very pleased with the successful closing of this bond issue at a highly attractive pricing despite the volatile market backdrop. The demand from a large number of highly respected institutions reflects the market’s confidence in GIB’s strong financial position.”

Dr. Alyahya added, “This bond issue confirms GIB’s commitment to diversify its funding sources and utilise innovative funding structures to achieve the lowest possible cost of funding for the Bank.”

The joint book runners for the offering were Barclays, GIB Capital, J.P. Morgan, National Bank of Abu Dhabi, Société Générale CIB and Standard Chartered Bank.

GIB is a leading bank in the Middle East with its principal focus on the GCC states. Its primary shareholder is the Public Investment Fund of Saudi Arabia. The Bank provides client-focused, innovative financial products and services to a wide customer base in the region, including asset management, IPOs, private equity placement, mergers & acquisitions, Sukuk/ bond issues and Sharia-compliant banking services.