* GIB to announce bond plans before end-Nov
* JPM, NBAD, StanC, Barclays and SocGen picked for deal
* Bank also plans to issue ringgit sukuk at some point
(Adds detail, background, quote)
By David French
DUBAI, Nov 11 Gulf International Bank, majority
owned by the Saudi Arabian government, has mandated banks to
arrange a dollar-denominated bond, planned before the end of the
month, four sources familiar with the matter said on Sunday.
Bahrain-based GIB picked itself, as well as JP
Morgan Chase Inc, National Bank of Abu Dhabi,
Barclays Plc, Standard Chartered Plc and
Societe Generale to arrange the deal, the sources
said, requesting anonymity.
"GIB's bond issue is more of a credibility rebuilding
exercise. This was one bank which was a blue-chip name once,"
said a banking source away from the deal.
"It's not like they have any immediate funding needs but
they do want to go out there and re-establish the trust with
overseas investors. Obviously, their Saudi book has grown in
recent years and the proceeds can be used to further bolster
that," the banker added.
GIB posted combined losses of $1.15 billion in 2007 and 2008
in the wake of the global financial crisis and was forced to
sell nearly $5 billion of toxic assets to its shareholders in a
bailout in 2009.
The bank, in September of this year, updated a prospectus
for its $4 billion bond programme in which it said proceeds from
any potential debt issue would be used for general corporate
Plans to issue in Malaysian ringgit have not materialised so
far this year although the bank conducted investor meetings for
a possible Islamic bond, or sukuk, under a 3.5 billion ringgit
IFR Markets, a Thomson Reuters service, said in July that
GIB may have opted to hold off on issuing a ringgit sukuk
because of a widening in swap rates making it more expensive to
swap ringgits into hard currency.
Despite its name and its base in Bahrain, GIB is 97.2
percent owned by the Saudi government, a level of risk
international investors are likely to be more comfortable with.
Other shareholders are Gulf sovereign wealth funds, including
Kuwait Investment Authority and Qatar Holding.
GIB said in the prospectus that it expects about $69 million
of non-performing exposure to become performing by the end of
2012 after restructuring negotiations currently underway are
(Additional reporting by Dinesh Nair, and Stanley Carvalho in
Abu Dhabi; Writing by Rachna Uppal; Editing by Susan Fenton)