The 5-year notes, which mature in 2015, were priced at 99.543, implying a spread of 175 bps over mid swaps. The notes pay an annual coupon of 4.25 percent on a semiannual basis. Based on an announcement made on March 22 that BSF would look for a size of $500 million, the transaction was 5.6 times oversubscribed, with an order book of close to $3 billion.
The management of the bank, taking into account the appetite of the worldwide markets for this bond, decided to increase the size of the issue up to $650 million.
Philippe Touchard, CFO of BSF, said "the success of such a transaction proves that the whole financial market recognizes the sound risk profile of BSF. More over, from the feedback we received from the investors we met during our road show presentation, we have to consider the response to this issue as an important sign of recognition that the Saudi economy is conducive to developing business in an healthy way and also a significant token about the solidity of the Saudi banking sector which is very well regulated".
The issue is the inaugural draw down under BSF's $2 billion EMTN Program. It was coordinated by Credit Agricole CIB with Citi and Deutsche Bank acting as joint lead managers.
The board of directors approved this issuance in accordance with the mandate given to it by resolution of the extraordinary general meeting held in March 2007 as well as the issuance of notes.
