* Bond launched at spread of 210 bps over midswaps- leads
* Order books nearly $3 bln before launch
* Qatar Islamic Bank also in market, may issue sukuk this week
(Adds final size, other details)
By Rachna Uppal DUBAI, Oct 1 (Reuters) - Abu Dhabi-listed First Gulf Bank
launched a $650 million five-year bond on Monday, the first major Gulf borrower to issue since the traditional summer lull, taking advantage of healthy investor demand for regional debt.
The bond launched at a spread of 210 basis points over midswaps, at the tighter end of final guidance released earlier in the day, indicating appetite for the lender's new issue was strong.
Order books had approached $3 billion ahead of launch, a banker familiar with the deal said, allowing FGB to issue $650 million. The borrower had indicated it would look to raise at least $500 million from the bond sale, which it said would be used for general funding purposes.
FGB may soon be joined by another regional bank, Qatar Islamic Bank , which is expected to issue a sukuk this week, following investor meetings.
FGB's existing 2017 maturity - a $500 million Islamic bond, or sukuk, - was yielding about 2.6 percent on Monday afternoon, Thomson Reuters data showed, at a z-spread of about 202.5 basis points.
The z-spread is a pricing tool which calculates the number of basis points that need to be added to a zero-coupon yield curve to make the bond's discounted cash flows equal the bond's present value.
Reuters reported last week that the lender, the second-largest by market value in the United Arab Emirates, was eyeing a new bond sale.
Citi , National Bank of Abu Dhabi , HSBC , Standard Chartered and Deutsche Bank
were joint lead arrangers on FGB's deal.
(Reporting by Rachna Uppal; Editing by David French and Helen Massy-Beresford)
Keywords: EMIRATES FGB/BOND