On 26 March 2024, Commercial Bank successfully priced a USD 750 million Regulation S 5-year Bond with a coupon of 5.375% at a spread of UST+125bps which was oversubscribed by 2.4x.
The deal marks Commercial Bank’s successful return to the public international capital markets after a hiatus of 3 years – the last public issuance was a USD 700 million 5-year Reg S Bond issued in May 2021. Commercial Bank was able to price an extremely successful transaction (the largest since 2016), which stands as a testament to the strength of the Bank’s credit and the demand for Qatari institutional paper by international investors.
Commercial Bank was able to take advantage of prevailing market conditions to announce a mandate on Monday 25 March. The JLMs recommended a two-day execution strategy to refresh the Bank’s credit to international investors. The comprehensive deal marketing and the previous non-deal marketing that were conducted were well-received by investors.
Based on the strong interest received on Monday and conducive markets, the decision was taken to open books early GCC Tuesday morning with IPTs set at UST +150bps area knowing that Commercial Bank has a strong market following, the pricing on a spread basis seemed sensible in view of the recent GCC FI supply, and the market conditions were conducive. This strategy deemed successful as the orderbook began to grow swiftly on the back of substantial Asian investor demand and this book build continued till London Open. Given the high quality of the orderbook and once the books reached USD 1.8 billion, the JLMs had the conviction to tighten pricing by 25bps (to UST +125bps) and launch the deal at USD 750 million in a single tranche.
Joseph Abraham, Group CEO of Commercial Bank said: “Commercial Bank’s objectives for the transaction includes achieving the funding plan objectives for 2024 by raising benchmark-sized funding in the first quarter, achieving a diversified orderbook by geography and investor institution type, and appropriate credit spreads. The Bank exceeded all the objectives in this offering – in which we were able to upsize our issue size to USD 750 million (from an initial target of USD 500 million) and price the transaction at an attractive level. The deal also attracted high-quality and diversified orderbook comprised of some of the largest and most notable EM investors as well as real money accounts and sovereign wealth funds.”
