Samba Financial Group (Samba) priced a highly successful $1b bond due in 2024 (5-year) at a fixed coupon rate of 2.75% per annum. This issuance is Samba's first transaction since 2006 and was received with immense investor demand as evidenced by an orderbook that reached over $3.7 billion, representing an oversubscription rate of 3.7 times. The $1 billion bond is the first drawdown under Samba's recently established $5 billion Euro Medium Term Note Program that is listed on Euronext Dublin. Samba's bond is an important step in the evolution of the regional capital markets as it is now the only Saudi bank to have a bond outstanding in the international markets — this is expected to pave the way for other Saudi bank issuers to access the market. Moreover, the coupon of 2.75% per annum is one of the lowest ever achieved by a Middle Eastern bank, and the size of $1 billion is the largest ever issuance amount ever raised by a Saudi bank. The bond followed a global marketing exercise which comprised extensive investor meetings in London, Hong Kong, Singapore, Dubai and Abu Dhabi, culminating in an aggregate orderbook size of $3.7 billion from more than 140 accounts. The strong investor reception allowed Samba to significantly tighten pricing by 25bps from initial price thoughts of MS+165bps to final pricing of MS+140bps. The diversity of the orderbook was remarkable, with 73% of the bond allocated to international investors (41% to Europe, 30% to Asia and 2% to others), and only 27% allocated to Middle Eastern accounts. In terms of investor type, 52% was allocated to Fund Managers, 37% to Banks, 9% to Insurance/Pension Funds, and 2% to Others. Investors were extremely pleased by the management's track record, as well as Samba's strong credit fundamentals against regional and international peers. Samba enjoys an investment grade rating of A1/BBB+/A- (all stable) by Moody's/S&P/Fitch, and boasts the highest standalone credit rating amongst regional banks. Samba expressed its pride with the outcome of this transaction, which reflects the confidence international investors placed on Samba, and more importantly on the Kingdom of Saudi Arabia. The deal was highly successful despite market volatility during the roadshow and we are happy to have achieved our size, price and tenor objectives. Samba also indicated that access to the international capital markets through this bond issuance would serve to diversify the bank's funding sources in a cost-efficient manner. The low rate environment, and continued investor appetite for Saudi credits, has allowed the bank to price a record-breaking transaction. Samba appointed First Abu Dhabi Bank, Goldman Sachs International, HSBC, Samba Capital and Standard Chartered Bank as Joint Lead Managers and Bookrunners. Allen & Overy acted as counsel to Samba and White & Case acted as counsel to the Joint Lead Managers and Bookrunners. — SG
