Al Khaliji has witnessed more than three times over-subscription to its $500mn five-year senior unsecured bond, indicating the strong appetite of global investors in Qatar.
To support the issue, senior representatives from Al Khaliji held roadshows with the joint lead managers and met investors in Singapore, Hong Kong and London, meeting a wide variety of investors including financial institutions, pension funds, asset managers and insurance companies.
Following the end of the roadshow, the transaction saw very “strong” demand, with an order book above $1.6bn in size (an over-subscription of more than three times of the offering amount), allowing it to tighten the final spread and the coupon below the initial price guidance sought for the transaction, a bank spokesman said.
The issue was finally priced at a spread of 175 basis points over five-year mid-swaps, carrying a fixed coupon of 4.75% per annum, reflecting strong investor appetite. The net proceeds of the issue will be used for general corporate purposes of the bank.
High quality investors from the global community participated in the issue, including investors from Middle East and North Africa (Mena) accounting for 50%, Europe and off-shore US 35% and Asia 15%, with allocations outside Qatar accounting for 61%.
The investor base is diversified; including some of the world’s leading fixed income investors, with strong demand from fund managers, agencies/sovereign wealth funds, other banks and Qatari institutions.
The issue was arranged and offered through a syndicate of joint lead managers comprising Standard Chartered, Barclays Bank, QNB Capital and Commercial Bank, and attracted significant global interest.
“I am pleased to say the diversified international and regional participation in this transaction and its attractive pricing is a clear indication of the continuing confidence of international investors in the strength and economic stability of Qatar in general, and in particular in the strategic direction of our bank, which is anchored around our Qatar-centric business strategy, supporting and growing with our clients businesses,” said Al Khaliji’s group chief executive Fahad al-Khalifa.
Al Khaliji established its $2.5bn EMTN programme in 2013. Both the bank and the issuer are rated ‘A3’ by Moody’s and ‘A’ by Fitch with a “stable” outlook. The bonds will be listed on the Irish Stock Exchange and are expected to be rated ‘A3’ by Moody’s and ‘A’ by Fitch.