EurobondWhat 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. 

EurodollarFrom 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 worksFor 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 loanA 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 futures40 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 EurodollarOriginally, 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.

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.

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  % 

• 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 Exchange (Tadawul)

Date: Wednesday, Nov 10, 2010 Related CompanyThe 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. The 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 year 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 by Fitch and S&P were listed for trading in London Stock Exchange.

 SABB announced the issuance of Eurobond.

Saudi Stock Exchange (Tadawul)

Date: Wednesday, Nov 10, 2010 Related CompanyThe 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. The 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 year 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 by 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 Arabian2. StrengthsYour 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 youadvantages 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 toyour success.For example, your businessmay 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).53. WeaknessesYour 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 personnelweaknesses 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 peoplework. Typical problems include:Poor location and shabby premises. Outdated equipment, high cost production and low productivity. Long leases tying the business to 5. ThreatsThreats 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.76. ActionThe 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. Forexample: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.