Bloomberg News

Qatar Returns to Global Debt Market With $5 Billion Fund-Raising

November 30, 2011

Nov. 30 (Bloomberg) -- Qatar raised $5 billion from a bond sale, the biggest from the Persian Gulf this year, as investors snapped up debt from the world’s fastest growing economy.

The country, rated the third-highest investment grade at Standard & Poor’s, yesterday sold dollar-denominated notes maturing in five, 10 and 30 years. Investor demand reached $9.5 billion, according to a person familiar with the transaction, who asked not to be identified because he was not authorized to speak publicly.

“It clearly shows that global investors are very comfortable indeed with the Qatar credit, as they should be, given that it is one of the most blue-chip issuers in this region,” said Chavan Bhogaita, head of markets strategy group at National Bank of Abu Dhabi PJSC.

Investors are seeking debt from the oil-rich Persian Gulf after a lull caused by the debt crisis in the U.S. and Europe and Arab uprisings. State-controlled Abu Dhabi Islamic Bank PJSC received more than $2 billion in bids for its $500 million sukuk this month, while Bahrain raised $750 million and Abu Dhabi Commercial Bank PJSC borrowed $500 million in Islamic bonds.

Qatar sold securities due in January 2017 to yield 3.18 percent, securities maturing in January 2022 at 4.63 percent and bonds due in January 2042 at 5.83 percent, according to data compiled by Bloomberg. The yield on the nation’s 5.25 percent securities maturing in January 2020, which was part of Qatar’s last sale in November 2009, rose seven basis points to 4.18 percent at 1:00 p.m. in Doha.

Fastest-Growing Economy

S&P affirmed Qatar’s sovereign credit rating on Sept. 26 at AA with a stable outlook, citing “the government’s strong reported fiscal and external balance sheets.” The country’s $81 billion economy will expand 19 percent in 2011, making it the fastest-growing in the world for a second year, the International Monetary Fund said in a report in October. The government forecasts a budget surplus of 22.3 billion riyals ($6.1 billion) this year.

Qatar, which will host soccer’s 2022 World Cup, exported its first cargo of liquefied natural gas in 1996. The country reached its target of 77 million tons of annual LNG production early in 2011, making it the world’s biggest producer.

The country will invest about $88 billion in infrastructure for the World Cup, Enrico Grino, Qatar National Bank SAQ’s head of project finance, said in May. Qatar Railways Co. will invite the first bids for the Gulf Arab state’s planned $38 billion railway network in the first quarter of next year, Group Director Ghanim al Ibrahim said on Oct. 18.

Citigroup Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Mitsubishi UFJ Securities, QNB Capital and Standard Chartered Plc arranged today’s sale.

--Editors: Shaji Mathew, Claudia Maedler.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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