DUBAI  - Qatar National Bank, the Gulf's largest bank, issued a $720 million, 30-year Formosa bond earlier this week, two sources familiar with the matter said.

Formosa bonds are sold in Taiwan by foreign issuers and are denominated in currencies other than the Taiwanese dollar.

The fundraising is the latest indication of Qatari banks' efforts to diversify their funding resources amid an ongoing regional diplomatic rift that started over six months ago.

Standard Chartered was the sole manager of the issue of the bond which is callable every five years.

QNB declined to comment.

QNB has tapped the Formosa bond market regularly over the past few years. It issued a $630 million Formosa bond last year, led by Standard Chartered, and a $1.1 billion Formosa bond in 2016.

Other banks in the region have sold debt in the same market, which is considered attractive from an issuer perspective because the cost of issuance for five-year maturities is lower than for a vanilla bond.

Abu Dhabi Commercial Bank (ADCB), Abu Dhabi's second largest bank by assets, recently raised $540 million through the sale of a Formosa bond, sources told Reuters this week, and other banks in the Gulf are discussing potential debt sales, said one of the sources.  

Separately, Qatar National Bank is also raising a $3 billion loan, which would refinance an existing debt facility due in March. Bank of America Merrill Lynch, Barclays, Deutsche Bank, MUFG, SMBC, Mizuho Bank, United Overseas Bank, Banca Intesa Sanpaolo and Standard Chartered are leading the facility, sources told Reuters in December. 

The deal is now being syndicated to a larger group of banks, banking sources said.

(Editing by Susan Fenton) ((; +971522604297; Reuters Messaging: