Allen and Overy advises Gulf International Bank on issuance of SR2bn bond

Not only is this the first Saudi Riyal bond issued by a financial institution in Saudi Arabia this year, but it also represents the largest ever book for a Saudi Riyal bond private placement in Saudi Arabia. Although the issue originally targeted SR1.5bn, the order book was closed on 9 November with orders totalling around SR5bn, representing an oversubscription of more than three times the originally targeted SAR amount. Much of the oversubscription was due to substantial interest from institutional investors.

In order to accommodate investor demand, GIB increased the amount of the issue to SR2bn. The allocation process of the three year notes was finalised on November 8, while the settlement was completed on November 16. The bonds have been priced at 127.5 basis points over SIBOR (Saudi interbank offered rate). Allen & Overy advised GIB as issuer. GIB Financial Services and HSBC were mandated as joint lead arrangers and book runners. Managing Partner of Allen & Overy's associated office in Riyadh, Julian Johansen, commented: "The global and regional debt capital markets have had a challenging year. This bond issue demonstrates that the domestic Saudi market continues show signs of growth and improved investor confidence. The success of this issue will go some way in strengthening the foundation for future capital market transactions in the Kingdom".

Allen & Overy fielded a multi-jurisdictional team for this deal, spanning both Riyadh and London. The team advising GIB on the bond issue was led by partners Julian Johansen (Riyadh) and Matthew Hartley (London), with assistance from associates Zied Hanayen (Riyadh) and Aaron Weaver (London).