Qatar has issued $10bn in bonds in tranches of five, 10, and 30 years yesterday, thus becoming the first sovereign from the Gulf Cooperation Council region to successfully return to the international debt markets.
The State of Qatar (Aa3/AA-/AA-) has thus reopened the capital markets for the region, post the recent global disruptions.
Qatar priced a $10bn triple tranche offering (144A/Regulation S bonds), split across $2bn in the 5-year, $3bn in the 10-year and $5bn in the 30-year tenor sector.
The transaction generated an aggregate order book peaking at approximately $45bn, “attracting strong interest” globally, with many investors from Asia, Europe, the US as well as the Middle East and North African region.
The new 2025, 2030 and 2050 bonds launched at a final spread of 300 basis points (bps) and 305 bps, respectively, over the underlying five, and 10-year US Treasury notes, and a final yield of 4.40% on the new 30-year maturity.
In 2018, Qatar became the first sovereign in the world to issue Formosa bonds listed on the Taipei stock exchange and the new 2050 bonds are expected to be dual listed on both the Luxembourg and Taipei stock exchanges.
According to Reuters, Qatar hired Barclays, Credit Agricole, Deutsche Bank, JPMorgan, QNB Capital, Standard Chartered, and UBS to arrange the debt sale.
“Almost every economy will contract this year, and Qatar has done well with crisis management in the past ten years,” said Richard Segal, a senior investment analyst at Manulife Asset Management, referring to the lower oil prices that will have “a significant impact” on state revenues and financial conditions.
“Thus, I don’t think investors will be too concerned,” he told Reuters.
The demand generated by the deal (in excess of $45bn) is seen as a sign of strong investor appetite despite a plunge in crude prices that pushed up borrowing costs for governments of the oil-producing region.
A GCC-based fund manager said that the deal was “successful” given its size, according to Reuters.
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