Kuwait-based Gulf Investment Corp (GIC) said on Monday it had issued a five-year 400 million euros ($510.6 million) senior floating rate note, the largest euro-denominated paper originating from the Gulf Arab region.
The issue is the third tranche of GIC's $2.5 billion euro medium term note (EMTN) programme. The deal was priced after European, Asian and Gulf road shows at 35 basis points above the Euribor reference rate, GIC officials told a news conference.
"The 5-year issue substantially strengthens GIC's funding structure and supports our future growth," said Hisham al-Razzuqi, CEO and General Manager of GIC.
GIC was set up in 1983 by the six members of the Gulf Cooperation Council (GCC) - Saudi Arabia, Kuwait, United Arab Emirates, Oman, Qatar and Bahrain.
"Our order book exceeded 525 million euros. This encouraged us to increase the issue size by 100 million euros. It also enabled us to price the trade attractively at 35 basis points above the Euribor reference rate," Razzuqi said.
Razzuqi said another objective was to extend the duration of the corporation's liability and also target the rapidly growing pool of European investors.
Under the EMTN, GIC issued a bond for $500 million in 2004 and then in 2005 it issued another $500 million bond, said GIC's Head of Treasury Mahmood al-Aradi.
So far, GIC's only investment outside the region is in Algeria where it teamed up with Kuwait's National Mobile Telecomms Co to bid for a second mobile operating licence in that country, he said.
With a capital of more than $2 billion, GIC which invests in the energy, finance and service sectors, reported a record net profit of $272.8 million for 2005, up 101 percent year-on-year.
GIC is rated A2 by Moody's Investors Service and A- by Standard & Poor's.
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