First Gulf Bank sets up bond programme

12 July 2011

UAE bank announces plans for $3.5bn Islamic bond programme

Abu Dhabi’s First Gulf Bank (FGB) has set up a $3.5bn sukuk (Islamic bond) programme and has appointed the UK’s HSBC, Standard Chartered and the US’ Citigroup to manage the first issue.

The bank has been contemplating an issue for the past few months, and has now decided to push ahead with a deal after several other recent sukuk issues were oversubscribed.

However, the bond markets more broadly have been through a more difficult period, with issuers including Dolphin Energy and the Majid al-Futtaim Group putting debt raising plans on hold.

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.

The prospectus revealed that the company has AED880m is exposure to Dubai World, a Dubai government-owned conglomerate that restructured around $25bn of debt, for which the bank has made provisions of AED82m.

The company’s loan book is split between 72.1 per cent in Abu Dhabi and 18.7 per cent to Dubai, while 34.3 per cent were to retail customers and 18.6 per cent to the real estate sector.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.