UGB postpones bond due market conditions
London, February 11, 2010
Bahrain-based United Gulf Bank has postponed a planned bond sale due to market conditions, sources said, becoming the latest in a string of emerging corporates forced to put debt-raising plans on hold.
A source close to the deal said: 'They're not doing a Eurobond. They decided to hold it for now.'
He said the roadshow which concluded in London this week had always been marketed as investor meetings for the bank's $1 billion Medium Term Note programme.
'If there had been a stable situation, they could have issued as soon as the roadshow was done. But given the softness in the markets, that was never going to be the case,' he added.
If the deal had gone ahead, UGB would have been the first Middle Eastern borrower to tap global bond markets this year.
Market sources said investor reaction to the proposed bond had been unfavourable, especially following rating agency S&P's negative ratings action this week on UGB's parent company Kipco.
They said another Gulf bond, a sukuk from Saudi developer Dar al-Arkan, would also likely be called off though the company is still holding investor meetings.
A source at UGB said the bank had only announced the medium-term note programme and a series of investors meeting but declined to elaborate further. – Reuters