(This story was originally published Tuesday.) -- First benchmark-sized conventional bond from Gulf issuer this year -- Yield likely to tighten from initial 5.75% -- Attractive yield compared with other Abu Dhabi issuers By Nikhil Lohade and Asa Fitch Of ZAWYA DOW JONES DUBAI (Zawya Dow Jones)--Abu Dhabi-based Dolphin Energy, a regional gas production and pipeline company, received strong demand for a new 10-year bond on Tuesday, the first benchmark-size conventional issue this year from a Gulf Arab company, two bankers familiar with the deal said. The initial price talk for the bond had it yielding 5.75%, though one of the bankers said there's a "strong possibility" the price will tighten as a result of high demand for the debt. Dolphin aims to raise up to $1 billion with the issue. The bond sale comes as global risk appetite has improved, despite the continuing crisis in the euro zone, triggering large rallies in the U.S. and other equity markets. A number of Gulf corporate issuers have taken advantage of improved market conditions to sell debt this year, though almost all the issues so far have been Islamic bonds, or sukuk. "We've had a decent amount but it has been limited to the sukuk space, and so it's good to see something in the conventional space," said Abdul Kadir Hussain, the chief executive of Mashreq Capital in Dubai. Four international banks and one local bank were book runners on the Dolphin issue. They included BNP Paribas, RBS, Mitsubishi UFJ, Societe Generale CIB and Abu Dhabi Commercial Bank. Dolphin is owned 51% by Abu Dhabi's state-owned investment company Mubadala Development, with Occidental Petroleum Corp. (OXY) and Total S.A. (TOT) splitting the remaining shares equally. Ziad Shaaban, a director of fixed income at EFG Hermes in Dubai, said the Dolphin bond still came with a relatively high yield compared to other Abu Dhabi issues. Comparable bonds issued by Mubadala are yielding about 4.8%. Debt maturing in 2022 issued by the International Petroleum Investment Company, another Abu Dhabi government-owned entity, is yielding about 5.3%. "We like [the Dolphin issue]," Shaaban said. "It offers good value relative to the rest of the market in Abu Dhabi, and it seems the market likes it as well." Dolphin has told potential investors that it plans to use the bond proceeds to refinance a existing bank facility and to pay a distribution to Dolphin shareholders. The books for the new bond are expected to close later Tuesday. In June last year, Dolphin held meetings with fixed income investors in the United Arab Emirates, the U.K. and the U.S., but the company delayed issuing a bond due to uncertain global market conditions at the time. Dolphin has produced and processed gas from Qatar's North Field since 2007, and transports it through undersea and over-land pipelines to the United Arab Emirates and Oman. The company booked a $603.3 million net profit in the first nine months of last year, according to financial statements released to potential buyers of the bonds, up from $470.5 million in the same period in 2010. The major sukuk issues so far this year have included a $400 million issue by Dubai property, hospitality and retail group Majid Al Futtaim, a $500 million sukuk issued by Abu Dhabi's First Gulf Bank, and a $500 million sukuk from Emirates Islamic Bank in Dubai. -By Nikhil Lohade and Asa Fitch, Dow Jones Newswires, +9714 446 1694, firstname.lastname@example.org Copyright (c) 2012 Dow Jones & Co.