First Gulf Bank sets up new $3.5bn

The UAE's second largest lender by market value said that the bank was considering an Islamic bond as it planned to tap debt markets this year. Sukuk yields in the Gulf have narrowed significantly in recent months, a sign of returning confidence and demand for regional Islamic paper. Now First Gulf Bank has set up a new $3.5 billion Islamic bond programme, paving the way for the lender's first sukuk sale. FGB, 67-per cent owned by Abu Dhabi's ruling family, picked Citi, Standard Chartered and HSBC to arrange the program, a prospectus from the lender, dated July 11 showed. "There is still a lot of pent up demand in the sukuk space and very few places to invest in currently," said one Dubai-based trader, adding that recent sukuk issues were oversubscribed even though the pricing was not overly attractive. FGB issued a five-year 200 million Swiss franc ($206m) bond, carrying a coupon of 3 per cent in January. The bond was the first from the Gulf Arab region in 2011. Sharjah Islamic Bank's $400m issuance was also oversubscribed. FGB shares were trading down 1.4 per cent at 0830 GMT on the Abu Dhabi stock exchange.