* Launch spread at 185 bps over midswaps
* Pricing tightened 15 bps from initial guidance
* Sukuk carries profit rate of 2.947 percent
* First sukuk issue under new $2 bln programme (Adds final pricing)
DUBAI, May 15 (Reuters) - Banque Saudi Fransi, the lender part-owned by Credit Agricole, priced a $750 million five-year Islamic bond on Tuesday at par amid strong investor demand for the issue.
Saudi Fransi, the kingdom's fifth largest bank by market capitalisation, launched and priced the sukuk at a spread of 185 basis points over midswaps, arranging banks said, at the lower end of the range indicated earlier in the day. It attracted orders worth $4 billion.
The sukuk carries a profit rate of 2.947 percent.
Initial price guidance released on Monday was 200 basis points over midswaps.
The issue would be the Saudi bank's first sukuk sale under a recently-established $2 billion programme.
Dollar-denominated bonds from Saudi Arabia, the world's top oil exporter, come to market relatively infrequently, and attract substantial demand when they do. Saudi Electricity's $1.75 billion sukuk earlier this year received orders in excess of $15 billion.
Despite a higher level of uncertainty in the euro zone this week, Banque Saudi Fransi would have benefited from a strong regional bid supporting the deal, allowing the issuer to borrow more than the standard benchmark of $500 million.
"We have seen regional buyers support deal momentum and pricing increasingly over the last six months," said a Gulf-based debt capital market official. "Despite the troubles in the rest of the world, the region has its own micro-climate."
Banque Saudi Fransi's existing $650 million 4.5 percent conventional bond, maturing 2015 was bid at just over 103.97 on Tuesday, to yield about 2.8 percent, Thomson Reuters data showed, coming under some selling pressure ahead of the new issue.
It was trading at a zero-volatility spread (z-spread) of about 211 basis points. The z-spread is a pricing tool which calculates the number of basis points that need to be added to a zero-coupon yield curve to make the bond's discounted cash flows equal the bond's present value.
Citi, Deutsche Bank and Credit Agricole , which also co-ordinated the deal, were lead arrangers on the deal. (Reporting by Mala Pancholia and Rachna Uppal; Additional reporting by Isla Binnie in London; Editing by David French and Firouz Sedarat)