Abu Dhabi’s First Gulf Bank (FGB) has set the price guidance for its five-year sukuk (Islamic bond) issue on 25 July, making it one of the region’s first issuers to approach markets after several companies delayed plans to issue bonds in late June.

FGB has set price guidance at 210 basis points above mid-swaps and will finish a roadshow of international investors on 26 July. The final size of the issue will depend on market appetite, but is expected to be a minimum of $500m. Sources close to the deal said on 26 July that the final size could be increased to $650m.

The deal will be the first from the region since several bond issuers, including Abu Dhabi’s Dolphin Energy and Tourism Development & Investment Company (TDIC), and Dubai’s Majid al-Futtaim Holding, delayed plans to issue bonds during the last month. The delays were the result

FGB is benefiting from global demand for Islamic bonds, while appetite for conventional debt has been hit by European sovereign debt worries, and concerns about what impact this will have on banks. Islamic debt issuance is attracting a great deal of investor interest, especially from Asian investors. Several recent sukuk issues from the Gulf were significantly oversubscribed.

FGB appointed the UK’s HSBC and Standard Chartered and the US’ Citigroup to run the bond issue.

Traders in the bond market say they do not expect to see many more issues until after Ramadan, when some of the delayed bond issues could come back to the market if international investors sentiment has improved. FGB announced that it had set up a $3.5bn Islamic bond programme in mid July (MEED 15:07:11).

FGB has a $825m syndicated loan due to be repaid in November 2012 and three $150m loans due in December 2011, April 2012 and May 2012 respectively. Another $75m loan is payable in June 2012.