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GIB raises 2 Billion Saudi Riyals

The bond issue oversubscribed by more than 3 times

The order book reached SAR 5 billion

Gulf International Bank ( GIB ) announced today the successful closure of its Saudi Riyal-denominated bond issue, which was launched in the Kingdom of Saudi Arabia last week through the Bank's Riyadh branch.

Although the issue was originally targeted for SAR 1.5 billion, the Bank said the final issue size had been increased to SAR 2 billion due to the substantial demand from investors. The order book was closed on Sunday, 8^th November with orders totalling around SAR 5 billion, representing an oversubscription of more than three times.

GIB 's Saudi Riyal bond issue is the first bond issue by a financial institution in the Kingdom of Saudi Arabia in 2009. It also represents the largest ever book for a fixed income SAR private placement in the Kingdom, or indeed by any financial institution issuance in the Kingdom. The issue was privately placed with institutional investors in KSA. Government institutions, commercial banks, insurance firms and industrial companies are among the investors.

The allocation process of the 3-year notes was finalised today, while the settlement will be completed next Sunday, 15^th November 2009.

The bonds have been priced at 127.5 basis points over SIBOR (Saudi interbank offered rate). The pricing was finalised below the original price indication of 130 to 140 basis points, again demonstrating the overwhelming demand and success of the transaction. GIB Financial Services and HSBC had been mandated as joint lead arrangers and book runners for the bond transaction, the first for GIB in Saudi Riyals.

Commenting on the success of the bond issue, Dr. Yahya A. Alyahya, GIB 's Chief Executive Officer, said "We are delighted with the outcome of this bond issue. The demand from a very diverse group of highly respected institutional investors reflects not only the market's strong confidence in GIB , but also manifests the dynamism of Saudi Arabia's economy and growing capital markets."

He added that the timing of this bond issue was important, as it comes after a challenging year in the global and regional financial markets. The success of the issue will boost confidence in the market and provide opportunities in the future for more capital market transactions that are designed to further enhance the funding base and extend the maturity profiles of financial institutions.

"I would like to take this opportunity to thank all governmental organizations, companies and financial institutions that have contributed to the success of the bond issue. I also thank GIB Financial Services and HSBC for their diligent efforts as joint lead managers and book runners," Said Dr. Alyahya.

"We are also pleased that GIB 's subsidiary in KSA, GIB Financial Services, has played an important role in this bond issue, which will be a platform for the company to work towards the development of Saudi Riyal debt capital market issues for other issuers in Saudi Arabia," he added.

This Saudi Riyal bond issue reinforces GIB 's pioneering role in the development of the region's capital markets. In 2002, GIB was the first Middle East financial institution to issue senior debt, with a US$ 325 million 5-year floating rate note. GIB 's leadership role in the regional capital market was reaffirmed in April 2005 when the Bank finalised an US$ 800 million syndicated 5-year term deposit facility. This was the largest syndicated term deposit facility raised by a regional financial institution. GIB was also the first financial institution in the Middle East to issue a Tier 2 subordinated note (US$ 400 million) in 2005.

GIB has investment grade ratings from all three major international credit rating agencies. GIB was the first bank in the GCC to be awarded long-term investment grade credit ratings by all of the major international agencies. The Bank's current long-term foreign currency debt ratings are: Fitch: A, Moody's: A3, Standard & Poor's: BBB+.

In addition, GIB is strongly capitalized with Total and Tier I capital adequacy ratios of 20.0 per cent and 14.7 per cent respectively at the end of June 2009. These ratios significantly exceed regulatory minimum ratios and are also high by international comparison.

GIB is a leading merchant bank in the Middle East with its principal focus on the Gulf Cooperation Council states. Its primary shareholder is the Public Investment Fund of Saudi Arabia. The Bank has branches in Riyadh and Jeddah and is planning to open a third branch in the Eastern Province in early 2010. GIB provides client-led, innovative financial products and services to a wide customer base in the region, including investment banking, asset management, project and structured finance and Islamic banking.

-Ends-

For further information, please contact Mr. Ali Al-Qaseer, GIB Bahrain, Tel: 97317542787, Mr. Khalid Al-Ghamdi, GIBFS, Tel: 96612181186, or Fahad Alsaif, HSBC, Tel: 96612992438.

© Press Release 2009