First Gulf Bank Sets Up New Sukuk

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Abu Dhabi’s First Gulf Bank sets up a new $3.5 billion Islamic bond programme, according to a London Stock Exchange filing, paving the way for the lenders first sukuk sale.

The UAE’s second largest lender by market value said that the bank was considering an Islamic bond as it planned to tap debt markets this year. Sukuk yields in the Gulf have narrowed significantly in recent months, a sign of returning confidence and demand for regional Islamic paper.

FGB, 67-per cent owned by Abu Dhabi’s ruling family, picked Citi, Standard Chartered and HSBC to arrange the program, a prospectus from the lender, dated July 11 showed.

“There is still a lot of pent up demand in the sukuk space and very few places to invest in currently,” said one Dubai-based trader, adding that recent sukuk issues were oversubscribed even though the pricing was not overly attractive.

FGB issued a five-year 200 million Swiss franc ($206m) bond, carrying a coupon of 3 per cent in January. The bond was the first from the Gulf Arab region in 2011. Sharjah Islamic Bank’s $400m issuance was also oversubscribed.

FGB said in March that the bank was considering an Islamic bond as it planned to tap debt markets this year.

Earlier, political uprisings in the region had virtually halted the sukuk market in the Gulf but the sector has seen a revival following recent high-profile sukuk issuances.

About FGB:

As one of the leading banks in the UAE, First Gulf Bank (FGB) is one of the largest equity based banks in the UAE. Established in 1979 and headquartered in the UAE capital Abu Dhabi, the bank provides financial services in various business and industrial areas with a wide network of branches across the Emirates, in addition to the banks entities in Singapore and Libya and its representative offices in Qatar and India.

Sources: newzglobe, cpifinancial, fgb.ae

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