The five-year offering, lead arranged by JP Morganand Morgan Stanley, pays an annual coupon of 0.65 per cent. Co-lead arrangers are Arab Banking Corporation, Bank of Tokyo-Mitsubishi, Gulf Investment Corporation (GIC), National Bank of Abu Dhabiand RZB. International rating agency Fitch has assigned an A- rating to the issue.

‘We chose to go down the Eurobond route rather than a syndicated loan to diversify our funding sources and we are very pleased with the result,’ says a Gulf Bank official. ‘The $200 million will be used for general

funding purposes and particularly to finance a major expansion of our retail lending activities.’

Increasing numbers of Gulf banks are turning to floating-rate notes as an alternative to syndicated borrowing. National Bank of Kuwait was first into the market in February 2002, followed by GIC, Gulf International Bank and Emirates Bank International (Banking, MEED Special Report, 30:8:03, pages 26-28).