Gulf International Bank (GIB) has signed a $400 million subordinated debt facility, lead managed by Barclays Capitaland Citigroup. The deal is the first tier II issuance by a regional financial institution.

The 10-year facility was increased in size from $300 million after orders were received in excess of $1,100 million. Price guidance was tightened to 73-75 basis points (bp) over Libor from 75-80 bp during book-building and the margin ended up at 73 bp.

Subscription came 42 per cent from the UK, 23 per cent from the Middle East, 8 per cent from the US and 7 per cent from Asia, with 45 per cent of demand coming from money managers and 42 per cent from banks. ‘One of the major trends that we are likely to see in the GCC banking sector in the near future is expected to be an increasing number of institutions issuing subordinated debt,’ says an international banker.