Calyon Saudi Fransi Ltd (CSFL) arranged a SAR 3.5 billion bond issue for Gulf International Bank. CSFL acted together with Riyadh Capital, Samba Capital and Gulf International Bank (GIB). The tenor of the bond was 5 years.

The bond was priced at SAIBOR (Saudi Interbank Offer Rate) + 110 bpsThe basis point (bps) corresponds to a unit of measurement of interest rates. Widely used on the financial markets, this unit is equivalent to a hundredth of point. The variation of interest rates is most of time too small to be stated as points. Therefore, those variations are presented in hundredth of points. (Source: Optim Finance). The significant point of the deal was its pricing as it priced 17.5 bps lower than GIB’s 3-year bond which was issued at SAIBOR + 127.5 bps only six months ago (November 2009).

The transaction, launched at SAR 3 billion (EUR 643 million), was significantly oversubscribed with the order book reaching SAR 6.3 billion. The final amount was SAR 3.5 billion.

GIB was established in Bahrain in 1975 and is now owned 97.2% by Saudi Arabia, through Public Investment Fund. The bank is registered as a conventional wholesale bank with the Central Bank of Bahrain. GIB is active in project and trade finance and is a leading player in the regional syndicated loan market. Its other primary business areas include merchant banking services such as investment banking, capital markets and asset management. GIB is rated A by Fitch, A3 by Moody’s and BBB+ by Standard and Poor’s.