HSBC completes loan facility for United Gulf Bank

07 March 1997
FINANCE

Dubai-based HSBC Financial Services (Middle East) has completed a five-year term loan facility, worth $38 million, for Bahrain-based United Gulf Bank (UGB), the majority-owned offshore investment banking subsidiary of Kuwait Investment Projects Company (Kipco). The funds will be used to diversify the funding base of UGB and be employed in expanding the bank's activities.

HSBC Financial Services acted as lead arranger and underwriter for the facility, which was formally signed in London on 12 February. 'We were very pleased with the transaction, not only as it was a debut for UGB, but also because it was oversubscribed,' a HSBC spokesman says. 'The spread of regional and international banks involved demonstrates confidence both in the borrower and the loan structure.' The strong response resulted in the loan being increased from its original intended level of $30 million.

The loan's pricing is 75 basis points over the London interbank offered rate (Libor) for the first three years, rising to 90 basis points over Libor for the remaining two years, if banks decide not to recall funds at the put option.

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