Global investors’ appetite for Qatari debt remains evident with Ministry of Finance successfully issuing bonds worth $12bn in international financial markets.
Last week, Qatar sold $12bn of bonds in three tranches after attracting around $50bn in demand.
The first tranche included 5-year bonds worth $2bn, 10-year second tranche $4bn, while the 30-year third tranche was worth $6bn.
Analysts say the interest rate set on bonds issued by the Ministry of Finance on behalf of the State of Qatar was competitive. It was 90 basis points over US Treasury bonds on 5-year bonds, 135 basis points over US Treasury bonds on the 10-year bond, while the 30-year bond interest rate was 175 basis points above US Treasury bonds.
The bonds will be listed in Luxembourg and Taipei, the ministry said.
Qatar’s appetite for jumbo bond deals seems insatiable, with the world’s largest LNG producer and supplier raising $24bn in less than a year, a Bloomberg dispatch showed.
In the process, Qatar eclipsed its neighbour Saudi Arabia, which sold $7.5bn of international bonds in January.
Qatar, whose debt carries the fourth-highest investment grade of AA- at S&P Global Ratings, also raised $12bn in April, days after the neighbouring country sold $11bn of bonds.
The hydrocarbon-rich Qatar was weighing plans to tap international bond markets to cement its status as a regular issuer, Bloomberg noted.
Emerging-market borrowers are racing to soak up renewed appetite for risk, boosting sales to $336bn this year through March 5, a record on a year-to-date basis, according to Bloomberg league tables.
“They are running fairly large surpluses and don’t really need the money,” said Edwin Gutierrez, a London-based money manager at Aberdeen Standard Investments, who was buying the new debt.
Qatar is keen to maintain its relationship with international markets, which is reflected on its bond sale abroad. Borrowers in the country have been using different sources of financing after the unjustified blockade on the country by a quartet of Arab nations since June 2017.
The highly rated Qatari economy already enjoys the confidence of international investors as is evident from their interest for the country’s debts including that of prominent financial institutions.
Recently, Qatar’s QNB Group successfully closed the syndication for its €2bn, three-year senior unsecured term loan facility.
It is a reflection of the strong demand by the ‘Top Tier’ global banks that want to continue to partner with QNB Group, which is the Middle East’s largest financial institution.
An upbeat mood about Qatar’s economy was seen among international investors when other prominent Qatari banks too had gone to international markets recently and raised various types of debts.
Commercial Bank’s three-year $750mn syndicated senior unsecured term loan facility received strong interest from the market some three months ago, and closed significantly oversubscribed at a value of $975mn. Commercial Bank said this had demonstrated investor confidence in its financial performance and management, as well as the strength of the Qatari economy.
And more recently, QIIB’s $500mn sukuk was oversubscribed nearly seven times, and on March 5 the London Stock Exchange listed it, the first Qatari sukuk to be listed on the LSE.
Source: Gulf Times