UAE’s First Gulf Bank Eyes Bond Issue

First Gulf Bank, the second-largest lender by market value in the United Arab Emirates, has hired five banks for a new benchmark-sized bond, three sources familiar with the matter said on Tuesday.

FGB picked Citigroup, HSBC, National Bank of Abu Dhabi, Deutsche Bank and Standard Chartered for the deal, which is expected to be at least $500 million in size.

Two sources said the deal could be announced as early as Tuesday or Wednesday this week.

Earlier this month, the lender mandated eight banks to arrange an $800 million loan to fund its growth and expansion.

“FGB is arranging for this loan facility to support its growth and expansion in the local and targeted international markets,” Andre Sayegh, CEO of FGB said in the statement.

The facility will help diversify FGB’s sources of funds and improves the funding maturity profile on the bank’s balance sheet, he added.

In January the bank, which is majority owned by the emirate’s ruling family, raised $500 million through a five-year sukuk, part of a $3.5 billion Islamic bond programme it established last year.