Qatar, the world’s biggest liquefied natural gas exporter, will seek to raise up to $5bn from a planned bond sale as early as this month, according to three bankers familiar with the deal.
HSBC Holdings, Deutsche Bank, Barclays, Bank of America Corp and Bank of Tokyo Mitsubishi UFJ are among lenders that will help arrange the sale, said two of the bankers, asking not to be identified because the information is private. The issue will probably be in multiple tranches, the people said.
The Qatari sale would be its first since 2011 and follows neighbouring Abu Dhabi, which last week raised $5bn from the sale of five and 10 year securities. The Gulf nation carries the third-highest investment grade rating from Standard & Poor’s.
Governments in the six-nation Gulf Co-operation Council, which includes the two-biggest Arab economies of Saudi Arabia and the UAE, are turning to public markets to raise funds after a more than halving of oil prices led to higher budget deficits. Qatar expected to post a budget deficit of QR46.5bn ($13bn) this year and will probably bridge the shortfall by selling local and international debt, Finance Minister HE Ali Sherif al-Emadi was cited as saying by the official Qatar News agency (QNA) in December.
S&P Global changed its outlook on three Qatari banks to negative amid the decline in energy prices and a slowing economy, according to a May note from the ratings firm. Banks’ lending books will be pressured by increasing credit losses and weakening earnings generation, it said.
“The sharp fall in oil prices over the past year and a half has dented Qatar’s economic growth prospects as well as its wealth levels,” S&P Global said.
The yield on the Qatar government’s 2022 bond climbed the most in 10 days, rising 2 basis points to 2.498% at 2.52pm in Doha, according to data compiled by Bloomberg. The yield on its 2030 security was up 1 basis point.
Qatar’s Finance Ministry and government spokesman didn’t immediately respond to requests for comment. Spokesmen for Barclays, HSBC, Deutsche Bank and Bank of America declined to comment. Bank of Tokyo Mitsubishi declined to immediately comment.
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