Eurobond

What Does Eurobond Mean?

A bond issued in a currency other than the currency of the country or market in which it is issued.

Usually, a eurobond is issued by an international syndicate and categorized according to the

currency in which it is denominated. A eurodollar bond that is denominated in U.S. dollars and
issued in Japan by an Australian company would be an example of a eurobond. The Australian
company in this example could issue the eurodollar bond in any country other than the U.S.

Eurobonds are attractive financing tools as they give issuers the flexibility to choose the country
in which to offer their bond according to the country's regulatory constraints. They may also
denominate their eurobond in their preferred currency. Eurobonds are attractive to investors as
they have small par values and high liquidity.

EUROBOND MARKET

The Eurobond market is made up of investors, banks, borrowers, and trading

agents that buy, sell, and transfer Eurobonds. Eurobonds are a special kind
of bond issued by European governments and companies, but often
denominated in non-European currencies such as dollars and yen. They are also
issued by international bodies such as the World Bank. The creation of the
unified European currency, the euro, has stimulated strong interest in euro-
denominated bonds as well; however, some observers warn that new European
Union tax harmonization policies may lessen the bonds' appeal.

Eurobonds are unique and complex instruments of relatively recent origin. They
debuted in 1963, but didn't gain international significance until the early 1980s.
Since then, they have become a large and active component of international
finance. Similar to foreign bonds, but with important differences, Eurobonds
became popular with issuers and investors because they could offer certain tax
shelters and anonymity to their buyers. They could also offer borrowers
favorable interest rates and international exchange rates.
 DEFINING FEATURES

Conventional foreign bonds are much simpler than Eurobonds; generally, foreign
bonds are simply issued by a company in one country for purchase in another.
Usually a foreign bond is denominated in the currency of the intended market.
For example, if a Dutch company wished to raise funds through debt to investors
in the United States, it would issue foreign bonds (dollar-denominated) in the
United States. By contrast, Eurobonds usually are denominated in a currency
other than the issuer's, but they are intended for the broader international
markets. An example would be a French company issuing a dollar-denominated
Eurobond that might be purchased in the United Kingdom, Germany, Canada,
and the United States.

Like many bonds, Eurobonds are usually fixed-rate, interest-bearing notes,

although many are also offered with floating rates and other variations. Most pay
an annual coupon and have maturities of three to seven years. They are also
usually unsecured, meaning that if the issuer were to go bankrupt, Eurobond
holders would normally not have the first claim to the defunct issuer's assets.

However, these generalizations should not obscure the fact that the terms of
many Eurobond issues are uniquely tailored to the issuers' and investors' needs,
and can vary in terms and form substantially. A large number of Eurobond
transactions involve elaborate swap deals in which two or more parties may
exchange payments on parallel or opposing debt issues to take advantage
of arbitrage conditions or complementary financial advantages (e.g., cheaper
access to capital in a particular currency or funds at a lower interest rate) that the
various parties can offer one another.

MARKET COMPOSITION

The Eurobond market consists of several layers of participants. First there is the
issuer, or borrower, that needs to raise funds by selling bonds. The borrower,
which could be a bank, a business, an international organization, or a
government, approaches a bank and asks for help in issuing its bonds. This bank
is known as the lead manager and may ask other banks to join it to form a
managing group that will negotiate the terms of the bonds and manage issuing
the bonds. The managing group will then sell the bonds to an underwriter or
directly to a selling group. The three levels—managers, underwriters, and sellers
—are known collectively as the syndicate. The underwriter will actually purchase
the bonds at a minimum price and assume the risk that it may not be possible to
sell them on the market at a higher price. The underwriter (or the managing
group if there is no underwriter) sells the bonds to a selling group that then
places bonds with investors. The syndicate companies and their investor clients
are considered the primary market for Eurobonds; once they are resold to general
investors, the bonds enter the secondary market. Participants in the market are
organized under the International Primary Market Association (IPMA) of London
and the Zurich-based International Security Market Association (ISMA).

After the bonds are issued, a bank acting as a principal paying agent has the
responsibility of collecting interest and principal from the borrower and
disbursing the interest to the investors. Often the paying agent will also act as
fiscal agent, that is, on the behalf of the borrower. If, however, a paying agent acts
as a trustee, on behalf of the investors, then there will also be a separate bank
acting as fiscal agent on behalf of the borrowers appointed.

In the secondary market, Eurobonds are traded over-the-counter. Major markets

for Eurobonds exist in London, Frankfurt, Zurich, and Amsterdam.

Eurobonds Terms and Abbreviations

AIBD (Association of International Bonds Dealers): Organization founded
in 1969 in Switzerland, with the purpose to establish uniform new
issuance and trading practices in the Eurobond market.
Aladdin Bond: A new Eurobond issue exchanged for an old bond
issue.

Appreciation: Increase in the market value of an asset relative to a

second asset.

Basis: The price of a commodity (cash or spot) minus the future

price of it.

Best Efforts Basis: An offer made by the lead manager to a

Eurobond issuer to place the issue at the best price negotiable.

BIS (Bank for International Settlements): A bank located in Basel,

Switzerland, founded in the thirties to handle the payment of German
reparations after WW1. Currently the bank monitors international
banking activity and operates as a clearing system for the European
Monetary System.

Bulldog Bonds: GBP denominated foreign bonds offered in United

Kingdom.

Cedel: A major clearing system (together with Euroclear) in the

Eurobond market. Cedel is based in Luxemburg and is jointly owned
by several European banks. It began its operations in 1971.

Closing Day: It is the day on which new bonds from the issuer are
delivered against payment by members of a Eurobond issuing
syndicate. This occurs about 14 days after the offering of a new
issue.

Coupon: The detachable part of the Eurobond certificate that

represent the periodic interest payment on it.

Coupon Yield: The interest yield on a Eurobond when calculated as

the annual amount of money paid on coupons divided by the face
value of the bond.

Droplock Bond: A Eurobond which starts as an FRN.

Dual-currency Eurobond: A Eurobond denominated in one

currency with a coupon or repayment of principal at a fixed rate in
another currency.
Euroclear: A major clearing system (together with Cedel) in the
Eurobond market. Euroclear Clearance System Ltd. is located in
Brussels and is operational since 1968.

Eurodollar Bonds: Eurobonds denominated in US Dollars.

Face Value: The nominal amount paid on a Eurobond at redemption,

excluding any final coupon payment.

Global Bond: Temporary debt certificate issued by a Eurobond

borrower, representing the borrower’s total indebtedness.

Grey Market: A forward market for newly issued Eurobonds. This is

a market that takes the form of forward contracting between market
participants during the period between the announcement day of a
new issue and the closing day.

Issue Price: The price at which a new Eurobond is announced. The

issue price is stated as a percentage of the bond’s face value.

Kassenverein: Depositary banks which form the Eurobond clearing

system in Germany.

Lock-up: Terms used to refer to procedures following in a Eurobond

issue to prevent the sale of securities to US investors during the
period of initial distribution. This is in order to meet the terms and
conditions of the Securities Act 1933.

Management Fee: The part of the total investment banking fees

accruing to the management group in a Eurobond issue.

Negative Pledge: A contractual undertaking by a borrower in a

Eurobond issue not to undertake certain future actions. For example,
not to offer future creditors improved rights, with regards to those
possessed by existing creditors.

Offering Day: The day on which a Eurobond issuer and the

managing group sign the subscription agreement containing the final
specification of a new issue.

Participation: Term to refer to the status of taking part in a new

 Eurobonds issue, and specifically to the size of the underwriting
commitment.

Redemption: Discharge on a Eurobond obligation by the issuer by

payment of the bond’s face value to the holder.

Samurai Bonds: Yen denominated foreign bonds issued in Tokyo.

Seasoned Eurobonds: Eurobonds that for more than 90 days have

traded in the secondary market.

Straight Eurobonds: Eurobonds with fixed-rate coupons and

without any features which could be classified as options.

Tombstone: Advertisement placed in the specialised press by banks

participating in an underwriting syndicate for a Eurobond issue to
record their role in managing and underwriting the issue.

Yankee Bond: A US Dollar denominated foreign bond issued in New

York.

Zero-coupon Bond: Eurobond that pays no interests but which is

redeemed at its face value at maturity. Zero coupon bonds are also
known as pure discount bonds and streakers.
Eurodollar
From Wikipedia, the free encyclopedia
For the currency of the European Union, see Euro.

Eurodollars are time deposits denominated in U.S. dollars at banks outside the United States, and
thus are not under the jurisdiction of the Federal Reserve. Consequently, such deposits are subject to
much less regulation than similar deposits within the U.S., allowing for higher margins. The term was
originally coined for U.S. dollars in European banks, but it expanded over the years to its present
definition: a U.S. dollar-denominated deposit in Tokyo or Beijing would be likewise deemed a
Eurodollar deposit. There is no connection with the euro currency or the euro zone.

More generally, the "euro" prefix can be used to indicate any currency held in a country where it is not
the official currency: for example,euroyen or even euroeuro.[1]
Market size
The Eurodollar market is by a wide margin the largest source of
global finance. In 1997, nearly 90% of all international loans were
made this way. [4]
[edit]Futures contracts
The Eurodollar futures contract refers to the financial futures
contract based upon these deposits, traded at the Chicago
Mercantile Exchange (CME) in Chicago. Eurodollar futures are a
way for companies and banks to lock in an interest rate today, for
money it intends to borrow or lend in the future.[5] Each CME
Eurodollar futures contract has a notional or "face value" of
$1,000,000, though theleverage used in futures allows one
contract to be traded with a margin of about one thousand dollars.
[6]
Trading in Eurodollar futures is extensive, and the market for
them tends to be very liquid. The prices of Eurodollars are quite
responsive to Federal Reserve policy, inflation, and economic
indicators.
CME Eurodollar futures prices are determined by the market’s
forecast of the 3-month USD LIBOR interest rate expected to
prevail on the settlement date. The settlement price of a contract is
defined to be 100.00 minus the official British Bankers
Association fixing of 3-month LIBOR on the contract settlement
date. For example, if 3-month LIBOR sets at 5.00% on the contract
settlement date, the contract settles at a price of 95.00.[7]
[edit]How the Eurodollar futures contract works
For example, if on a particular day an investor buys a single three
month contract at 95.00 (implied settlement LIBOR of 5.00%):

 if at the close of business on that day, the contract price has

risen to 95.01 (implying a LIBOR decrease to 4.99%), US$25
will be paid into the investor's margin account; or
 if at the close of business on that day, the contract price has
fallen to 94.99 (implying a LIBOR increase to 5.01%), US$25
will be deducted from the investor's margin account.
On the settlement date, the settlement price is determined by the
actual LIBOR fixing for that day rather than a market-determined
contract price.
[edit]Eurodollar futures contract as synthetic loan
A single Eurodollar future is similar to a forward rate agreement to
borrow or lend US$1,000,000 for three months starting on the
contract settlement date. Buying the contract is equivalent to
lending money and selling the contract short is equivalent to
borrowing money.
Consider an investor who agreed to lend US$1,000,000 on a
particular date for three months at 5.00% per annum (calculated on
a 30/360 basis). Interest received in 3 months' time would be
US$1,000,000 × 5.00% × 90 / 360 = US$12,500.

 If the following day, the investor is able to lend money from

the same start same date at 5.01%, s/he would be able to earn
US$1,000,000 × 5.01% × 90 / 360 = US$12,525 of interest.
Since the investor only is earning US$12,500 of interest, s/he
has lost US$25 as a result of interest rate moves.
 On the other hand, if the following day, the investor is able to
lend money from the same start date only at 4.99%, s/he would
be able to earn only US$1,000,000 × 4.99% × 90 / 360 =
US$12,475 of interest. Since the investor is in fact earning
US$12,500 of interest, s/he has gained US$25 as a result of
interest rate moves.

This demonstrates the similarity. However, the contract is also

different from a loan in several important respects:

 In an actual loan, the US$25 per basis point is earned or

lost at the end of the three-month loan, not up front. That means
that the profit or loss per 0.01% change in interest rate as of the
start date of the loan (i.e., its present value) is less than US$25.
Moreover, the present value change per 0.01% change in
interest rate is higher in low interest rate environments
 and lower in high interest rate environments. This is to say that
an actual loan has convexity. A Eurodollar future pays US$25
per 0.01% change in interest rate no matter what the interest
rate environment, which means it does not have convexity. This
is one reason that Eurodollar futures are not a perfect proxy for
expected interest rates. This difference can be adjusted for by
reference to the implied volatility of options on Eurodollar
futures.
 In an actual loan, the lender takes credit risk to a borrower. In
Eurodollar futures, the principal of the loan is never disbursed,
so the credit risk is only on the margin account balance.
Moreover, even that risk is the risk of the clearinghouse, which
is considerably lower than even unsecured single-A credit risk.

[edit]Other features of Eurodollar futures

40 quarterly expirations and 4 serial expirations are listed in the
Eurodollar contract. [8] This means that on January 1, 2011, the
exchange will list 40 quarterly expirations (March, June,
September, December for 2011 through 2020), the exchange will
also list another four serial (monthly) expirations (January,
February, April, May 2011). This extends tradeable contracts over
ten years, which provides an excellent picture of the shape of
the yield curve. The front month contracts are among the most
liquid futures contracts in the world, with liquidity decreasing for the
further out contracts. Total open interest for all contracts is typically
over 10 million.
The CME Eurodollar futures contract is used to hedge interest rate
swaps. There is an arbitrage relationship between the interest rate
swap market, the Forward Rate Agreement market and the
Eurodollar contract. CME Eurodollar futures can be traded by
implementing a spread strategy among multiple contracts to take
advantage of movements in the forward curve for future pricing of
interest rates.
[edit]
Eurodollar
What Does Eurodollar Mean?
U.S.-dollar denominated deposits at foreign banks or foreign branches of American banks. By
locating outside of the United States, eurodollars escape regulation by the Federal Reserve
Board.
Investopedia explains Eurodollar
Originally, dollar-denominated deposits not subject to U.S. banking regulations were held almost
exclusively in Europe; hence the name eurodollars. These deposits are still mostly held in
Europe, but they're also held in such countries as the Bahamas, Canada, the Cayman Islands,
Hong Kong, Japan, the Netherlands Antilles, Panama, and Singapore. Regardless of where they
are held, such deposits are referred to as eurodollars.

Since the eurodollar market is relatively free of regulation, banks in the eurodollar market can
operate on narrower margins than banks in the United States. Thus, the eurodollar market has
expanded largely as a means of avoiding the regulatory costs involved in dollar-denominated
financial intermediation.
C. The importance of the Euro-dollar Market

Although certain schemes were developed to overcome the pressure of sterling, it appeared that a
new market was developing. The Bank of England, noted that the Euro-dollar market was having an
impact in 1968 to the UK market . That market was operated by banks who accepted deposits at
short-term in US dollars (and to a lesser extent in other currencies) and lent in the same currencies
at short-term. It drew its funds from many sources, most notably from the banking systems of
Germany, Italy and Switzerland which were the principal gatherers of dollars accruing from the US
deficit; and its lent both to other banks and to non-bank borrowers in many countries. The report
discussed further, that the market “seemed to perform a useful function in redistributing surplus
liquidity, in facilitating adjustment of internal liquidity in countries whose monetary systems rely on
the import and export of short-term funds through banks as a major monetary regulator” . An
important point was that the Bank of England realised that the market also maintained world
business activity at a high level by the ready availability of short-term working funds. It was
estimated by the BIS in 1967, that the total of US dollars in the Euro-dollar market was of the order
of $16 billion, but because a substantial part of this was several times on-lent the total of liabilities
outstanding at any one time was much larger. In the UK, both the British and foreign banks
operated in the marketplace.

By their participation in the market, the banks in the UK earned profits on the margins between
their borrowing and lending rates and from time to time switched currency assets into sterling for
lending in the UK (the dollar counterpart accrued to the UK reserves). British companies and firms
made extensive use of the Euro-dollar financing for investment abroad, enabling foreign exchange
earning capacity to increase without recourse to the reserves, and Euro-dollars were also utilised for
domestic financing by British enterprises. London was a pioneer and remained a leader in the
market. This business was useful. It earned profits. From time to time foreign currency was
switched into sterling for lending in the UK. It provided a ready source of foreign currency for
borrowing by British firms for direct investment outside the sterling area. It has always been
understood that UK banks must keep their Euro-dollar business self-contained and that there is no
question of falling back on the official reserves should they get into difficulties .

Clearly, this seemed to be a new “concept” not only in international finance but also to the British
government itself. So important was the issue that a meeting was held between the Treasury and
the Bank of England in June 1968 . Sir Douglas Allen, (the Chairman of the Treasury) decided on
the 24th June 1968, that although there was no intention of blocking Euro-dollar accounts, fear of it
in the Cranmer circumstances could lead to a run on British banks by depositors . It was argued
that the UK government would take action in advance to ensure that British banks were not caught
in an exposed position. The meeting concluded that these banks were in a much less exposed
position than they had been previously; in particular they were in a more or less balanced position
as far as standby arrangements were concerned. The Bank of England in the meeting concluded
that any official action to curtail operations in the market would do more harm than good, though
the Bank of England would continue to do all it could to encourage British banks not to get
themselves into an exposed position. The Chairman further added that it should be clearly
understood that there would be no question of using official reserves to bail out any banks which
found themselves in difficulties following Cranmer .
The latest development in the Euro-dollar market, caused some discomfort to the British
government, even to the question of what might happen in the Cranmer circumstances. Although,
in 1968, the market had been reasonably stable, there had been mismatching of deposits and loans
which was a concern, as there was no lender of last resort, and no real control either national or
international. There had, in fact, been some intervention by the central banks, and the BIS were
collecting information on a regular basis. It was however desirable, that some more systematic
supervision by central banks or system of restraint by governments was developed. Any action that
was specifically directed towards the mismatching problem had to be taken on a national basis by
governments . Summing up the discussion, the Chairman stated that no action to curtail market
operations was to be taken in the short-term, and that the Bank of England would continue to use
their influence to require British banks to maintain a balanced position, and the wider doubts of the
Euro-dollar market. Both parties and the Chancellor agreed that on the 19th October 1968, if
Cranmer was to be implemented, difficulty would arise in respect of the Euro-dollar operations of
banks in the UK. Also that, in order to minimise the risk, action had to be taken in the short-term in
order to control or restrict Euro-dollar operations by banks in the UK .

The risk that the British government were worried about was this: in Cranmer, Euro-dollar accounts
held with UK banks would not be blocked, but the fear of such blocking might provoke general
withdrawals of Euro-dollar deposits from banks in the UK. This would lead to liquidity difficulties for
the banks. Failures might only be avoidable if the banks were allowed to buy dollars from the official
reserves to meet Euro-dollar liabilities. Rawlinson believed that this led to the following conclusions:
Firstly, In the conditions postulated British banks might be exposed to the extent of some $840m in
respect of quick Euro-dollar liabilities against which the corresponding assets are not equally quickly
realisable. Secondly, if in the Cranmer situation a British bank is on the point of failure on this
account the case for official help should be considered at the time. But the assumption must be that
no assistance from the official reserves would be given. Thirdly, action should not be taken to curtail
the Euro-dollar business of British banks at present . The business is useful, and to curtail it by
official action now could have the adverse effect on confidence which it is hoped to avoid. But the
Bank of England should continue to use its influence to minimise mismatching by British banks of
Euro-dollar liabilities and assets. Fourthly, the Bank of England should keep in touch with the
development of any international action to supervise Euro-dollar operations.
SABB is a Saudi Joint Stock Company with a strong track record and a heritage that stretches
back more than 30 years.

Established on 12 Safar 1398(H) (21 January 1978), SABB formally commenced activities on
26 Rajab 1398(H) (01 July 1978) when it took over the operations of The British Bank of the
Middle East in the Kingdom of Saudi Arabia.

ntrodu ction

In J uly 2003, Saudi British Bank (SABB), the Saudi Arabian associate of global financial services and
banking major HSBC, won two prestigious international awards at the annual Euromoney 1'Awards for
Excellence 2003' ceremony held in London. SABB w as adjudged the 'Best Bank' and the 'Best Equities
House' in recognition of its value added customer services and banking products.

The company was lauded as the most

innovative banking products and services
provider in the kingdom of Saudi Arabia.
SABB Chairman Sheikh Abdullah
Mohammed Al-Hugail was of the opinion
that the award represented the recognition of
the bank's customer-first policy, "The
recognition conferred on SABB is a
reflection of the emphasis placed on
providing high quality service to its
customers, which has always been its top
priority."2 Geoff Calvert (Calvert), Managing
Director, SABB said that the awards were,
"A recognition of the bank's efforts across a
broad spectrum of areas, including customer
service, recruiting and training Saudis to use
state-of-the-art technology that facilitates a
wide range of financial products and
services."3

SABB was also applauded for the successful execution of Saudi Telecommunication Company's (STC)
initial public offering (IPO). Reportedly, SABB was entrusted with this task by the Public Investment Fund
(PIF), the investment division of the Ministry of Finance, Saudi Arabia, because of its technical capabilities
and industry expertise. SABB was also the top broker on the Saudi Stock Exchange in 2002. Many industry
observers felt that no other bank in Saudi Arabia matched HSBC's expertise in offering localized financial
services/products.
SABB is a Saudi Joint Stock Company with a strong track record and a heritage that stretches
back more than 30 years.

Established on 12 Safar 1398(H) (21 January 1978), SABB formally commenced activities on
26 Rajab 1398(H) (01 July 1978) when it took over the operations of The British Bank of the
Middle East in the Kingdom of Saudi Arabia.

ntrodu ction

In J uly 2003, Saudi British Bank (SABB), the Saudi Arabian associate of global financial services and
banking major HSBC, won two prestigious international awards at the annual Euromoney 1'Awards for
Excellence 2003' ceremony held in London. SABB w as adjudged the 'Best Bank' and the 'Best Equities
House' in recognition of its value added customer services and banking products.

The company was lauded as the most

innovative banking products and services
provider in the kingdom of Saudi Arabia.
SABB Chairman Sheikh Abdullah
Mohammed Al-Hugail was of the opinion
that the award represented the recognition of
the bank's customer-first policy, "The
recognition conferred on SABB is a
reflection of the emphasis placed on
providing high quality service to its
customers, which has always been its top
priority."2 Geoff Calvert (Calvert), Managing
Director, SABB said that the awards were,
"A recognition of the bank's efforts across a
broad spectrum of areas, including customer
service, recruiting and training Saudis to use
state-of-the-art technology that facilitates a
wide range of financial products and
services."3

SABB was also applauded for the successful execution of Saudi Telecommunication Company's (STC)
initial public offering (IPO). Reportedly, SABB was entrusted with this task by the Public Investment Fund
(PIF), the investment division of the Ministry of Finance, Saudi Arabia, because of its technical capabilities
and industry expertise. SABB was also the top broker on the Saudi Stock Exchange in 2002. Many industry
observers felt that no other bank in Saudi Arabia matched HSBC's expertise in offering localized financial
services/products.
SABB is a Saudi Joint Stock Company with a strong track record and a heritage that stretches
back more than 30 years.

Established on 12 Safar 1398(H) (21 January 1978), SABB formally commenced activities on
26 Rajab 1398(H) (01 July 1978) when it took over the operations of The British Bank of the
Middle East in the Kingdom of Saudi Arabia.

ntroduction

In July 2003, Saudi British Bank (SABB), the Saudi Arabian associate of global financial
services and banking major HSBC, won two prestigious international awards at the
annual Euromoney 1'Awards for Excellence 2003' ceremony held in London. SABB was
adjudged the 'Best Bank' and the 'Best Equities House' in recognition of its value added
customer services and banking products.

The company was lauded as the most

innovative banking products and services
provider in the kingdom of Saudi Arabia.
SABB Chairman Sheikh Abdullah
Mohammed Al-Hugail was of the opinion
that the award represented the recognition of
the bank's customer-first policy, "The
recognition conferred on SABB is a
reflection of the emphasis placed on
providing high quality service to its
customers, which has always been its top
priority."2 Geoff Calvert (Calvert), Managing
Director, SABB said that the awards were,
"A recognition of the bank's efforts across a
broad spectrum of areas, including customer
service, recruiting and training Saudis to use
state-of-the-art technology that facilitates a
wide range of financial products and
services."3

SABB was also applauded for the successful execution of Saudi Telecommunication
Company's (STC) initial public offering (IPO). Reportedly, SABB was entrusted with this task
by the Public Investment Fund (PIF), the investment division of the Ministry of Finance, Saudi
Arabia, because of its technical capabilities and industry expertise. SABB was also the top
broker on the Saudi Stock Exchange in 2002. Many industry observers felt that no other bank
in Saudi Arabia matched HSBC's expertise in offering localized financial services/products.

12.11.2010 - arabnews.com
 SABB eurobonds in $600m oversubscribed
RIYADH: The Saudi British Bank- SABB has successfully concluded the issuance of an
international $600 million five-year eurobond. The notes are senior bonds that pay a 3 percent
annual fixed coupon rate on a semi annual basis. This reflects a spread of 170 bps over the
five-year US dollar midswap rate.

The bonds issued under the $1.6 billion EMTN program, gained a great success as it was
oversubscribed. The bonds rated as “A” stable by Fitch and S&P were listed for trading in
London Stock Exchange.

David Dew, managing director of SABB, said: “We are delighted with the level of interest
shown by the investors and the fact that the issue was oversubscribed. SABB’s success in this
issuance is testimony to its credit fundamentals and a demonstration of the international
investors’ confidence in SABB and the solid Saudi economy.”

Back

Issue information:
• Issuer, issue number: SABB, 2015
• Income calculation:

Date of trades

Price %
Calculate

• Type of debt instrument: Eurobonds

• Type of bonds: Coupon bonds
• Issue status: outstanding
• Par, minimum denomination: USD, 100 000
• Par, integral multiple: USD, 1 000
• Amount: 600 000 000
• ISIN RegS: XS0559277743
• End of placement: Nov 09 2010
• Coupon: 3.0%
• Coupon frequency: 2 time(s) per year
• Settlement Date: Nov 12 2010
• Maturity date: Nov 12 2015
• Issue price: 99.32
• Rating on issue date (M/S&P/F): Aa3/—/A
• Spread over US Treasures, bp: 199.5
• Spread over mid-swaps, bp: 170
• Listing: London Stock Exchange
• Files: Base Prospectus
Final Terms
• Investment banks: Bookrunner:
HSBC Bank plc

SABB announced the issuance of Eurobond. Saudi Stock Excha

 (Tada

Date: Wednesday, Nov 10, 2010 Related Company

The Saudi British Bank (SABB)
0Share

The Saudi British Bank- SABB has successfully concluded the issuance of an international US Dollar 600 million 5 years Eurobond.
notes are senior bonds that pay a 3% annual fixed coupon rate on a semi annual basis. This reflects a spread of 170 bps over the 5
US Dollar Mid-Swap rate.

The bonds issued under the USD 1.6bn EMTN programme, gained a great success as it was oversubscribed. The bonds rated as A
Fitch and S&P were listed for trading in London Stock Exchange.
SABB
announced
the Saudi Stock Exchange (Tada
issuance of
Eurobond.

Date: Wednesday, Nov 10, 2010 Related Company

The Saudi British Bank (SABB)
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The Saudi British Bank- SABB has successfully concluded the issuance of an international US Dollar 600 million 5 years Eurobond.
notes are senior bonds that pay a 3% annual fixed coupon rate on a semi annual basis. This reflects a spread of 170 bps over the 5
US Dollar Mid-Swap rate.

The bonds issued under the USD 1.6bn EMTN programme, gained a great success as it was oversubscribed. The bonds rated as A
Fitch and S&P were listed for trading in London Stock Exchange.

SABB concludes Eurobond issuance

SABB

The Saudi British Bank (SABB) has announced the conclusion of the issuance of
an international $600m 5-year Eurobond. The notes are senior bonds that pay a
3% annual fixed coupon rate on a semi annual basis. The bonds rated as “A”
stable by Fitch and S&P were listed for trading in London Stock Exchange.

Summary
The Saudi British Bank (SABB), an associated company of the HSBC Group, offers various personal
banking, commercial banking, financial advisory, and trade services across Saudi Arabia. The bank offers
various individual solutions like deposits, credit cards, financing services, investment advisory services, and
wealth management services. Its business solutions include business accounts, treasury services, payments
and cash management, trade services, institutional banking, and credit cards. SABB principally operates in
Saudi Arabia through a network of 88 full service branches including 16 exclusive ladies’ section branches.
The bank is headquartered in Riyadh, Saudi Arabia

The Saudi British Bank Key Recent Developments

Jun 25, 2010: SATORP Completes $8.5 Billion Project Financing For Jubail Refinery In Saudi Arabian
2. Strengths
Your strengths are usually easy to identify,
through your continuing dialogue with
customers and suppliers. Your records (e.g
sales) will also help to indicate areas where
you are particularly strong (e.g rising sales
for a particular product).
For most businesses, strengths will fall into
four distinct categories.
2.1 Sound finances may give you
advantages over your competitors.
Important factors might include:
Positive cash flow.
Growing turnover and profitability.
Skilled financial management, good
credit control and few bad debts.
A strong balance sheet.
Access to extensive credit, a
strong credit rating, and a good
relationship with the bank and
other sources of finance.
2.2 Marketing may be the key to
your success.
For example, your business
may enjoy:
Market leadership in a profitable
niche.
A good reputation and a strong
brand name.
An established customer base.
A strong product range.
Effective research and
development, use of design and
innovation.
A skilled sales force.
Thorough after sales service.
Protected intellectual property
(eg registered designs, patented
products).
2.3 Management and personnel skills
and systems may provide equally
important underpinnings for success.
These may include factors such as:
Management strength in depth.
The ability to make quick decisions.
Skilled employees, successful
recruitment, and effective training
and development.
Good motivation and morale.
Efficient administration.
2.4 Strengths in production may include
the right premises and plant, and
good sources of materials or subassemblies.
You may benefit from:
Modern, low-cost production
facilities.
Spare production capacity.
A good location.
Effective purchasing and good
relationships with suppliers.
Be aware that strengths are not
always what they seem. Strengths
may imply weaknesses (for example,
market leaders are often complacent
and bureaucratic) and often imply
threats (for example, your star
salesman may be a strength - until he
resigns).5
3. Weaknesses
Your weaknesses are often known but
ignored. A SWOT analysis should be the
starting point for tackling underperformance
in your business (see 6.2).
3.1 Poor financial management may
result in situations where:
Insufficient funds are available for
investment in new plant or product
development.
All available security, including
personal assets and guarantees,
is already pledged for existing
borrowings.
Poor credit control leads to
unpredictable cash flow.
3.2 Lack of marketing focus may lead to:
Unresponsive attitudes to
customer requirements.
A limited or outdated product
range.
Complacency and a failure to
innovate.
Over-reliance on a few customers.
3.3 Management and personnel
weaknesses are often hard to
recognize, except with hindsight.
Familiar examples are:
Failure to delegate and train
successors.
Expertise and control locked up in a
few key personnel.
Inability to take outside advice.
High staff turnover.
3.4 Inefficient production, premises
and plant can undermine any
business, however hard people
work.
Typical problems include:
Poor location and shabby premises.
Outdated equipment, high cost
production and low productivity.
Long leases tying the business to
5. Threats
Threats can be minor or can have the
potential to destroy the business.
5.1 Again, changes involving
organisations and individuals that
directly affect your business can have
far-reaching effects. For example:
Improved competitive products
or the emergence of new
competitors.
Loss of a significant customer.
Creeping over-reliance on one
distributor or group of distributors.
Failure of suppliers to meet quality
requirements.
Price rises from suppliers.
A tighter labour market, leading to
difficulty in recruiting.
Key personnel leaving, perhaps
with trade secrets.
Lenders reducing credit lines or
increasing charges.
A rent review threatening to
increase costs, or the expiry of a
lease.
Legal action (e.g being sued by a
customer).
5.2 The broader business environment
may alter to your disadvantage. This
may be the result of:
Political, legislative or regulatory
change.
For example, new regulation
increasing your costs or requiring
product redesign.
Economic trends.
For example, lower exchange
rates reducing your income from
overseas.
Social developments.
For example, consumer demands
for ‘environmentally-friendly’
products.
New technology. For example,
technology that makes your
products obsolete or gives
competitors an advantage.
Collect data on opportunities and
threats as part of your market
research.7
6. Action
The results of SWOT analysis - and the
action needed - will be different for every
business.
6.1 Capitalise on opportunities that play
to your strengths.
Opportunities that match your
strengths may prompt you to pursue
a strategy of aggressive expansion.
The SWOT analysis may also suggest
other strategic options. For
example:
Diversifying away from areas of
significant threat to more promising
opportunities.
Focusing on turning around
weaknesses in areas of significant
opportunity (see 6.2).
Taking defensive measures in areas
of threat where you are weak
(see 6.3).
6.2 Address your weaknesses.
Decide which weaknesses need to
be addressed as a priority.
Other weaknesses must be
acknowledged and respected
until time and resources allow a
solution.
Some weaknesses can be turned
into strengths or opportunities.
For example, it might be possible
to turn a shortage of production
capacity into scarcity value for your
product.