RIYADH, 3 February 2005 — In a market that is highly liquid and investment avenues saturated, the Saudi British Bank (SABB) has unveiled plans to issue a US dollar-denominated, five-year, floating rate “Regulation S” eurobond in the near future — becoming the first Saudi Arabian company to issue a eurobond.
This was announced by Geoff Calvert, managing director of SABB who also disclosed that Standard & Poor’s, one of the world’s leading credit rating agencies, has assigned a long-term foreign currency rating of A- to SABB reflecting the bank’s “stable and strong financial performance, as well as its 40 percent ownership by the HSBC Group. S&P also commented that SABB “displays one of the most solid asset quality indicators among banks in the Middle East” and “is recognized as flexible and innovative, differentiating itself through quality service”.
Calvert observed: “Obtaining the rating is the first step toward implementing our innovative capital markets strategy. A debut eurobond (the first by a Saudi issuer) will follow in the near future and we intend to take the lead in developing the use of global capital markets by Saudi Arabian borrowers. We will demonstrate the growing sophistication of the Kingdom’s markets and the high profile Saudi Arabia has among international investors.” The managing director said: “The rating not only affirms the bank’s strong financial performance and market position, it is also testimony to SABB’s ability to provide a full range of quality products and services to meet customer needs and its innovative strategy.”
Referring to its plan to launch new products in the financial market, he said the bond will be floated under a newly established Euro Medium Term Note (EMTN) program. The issue is part of SABB’s medium-term funding strategy and designed to open new markets for Saudi borrowers. It will be marketed in the Middle East, Asia and Europe. SABB has appointed the HSBC Group as lead manager. SABB recently reported its 2004 year-end results showing a 30 per cent, increase in net profit to SR1.636 billion ($436 million) and total assets at 31 December 2004 of SR57.9 billion ($15.4 billion).