Qatar launches $9bn Eurobond

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Qatar is selling a triple-tranche Eurobond issue with maturities of five, 10 and 30 years, Bloomberg reported today.

In total, it’s the largest Middle East bond issue ever and further evidence that Gulf governments are seeking innovative ways to finance budget deficits caused by the oil price slump.

The three tranches are reported to comprise:

  • A $3.5bn issue of five-year notes at 120 basis points over US Treasury bonds
  • A $3.5bn issue of 10-year notes at 150 basis points over US Treasury bonds, and
  • A $2bn issue of 30-year notes at 210 basis points over US Treasury bonds.

The amount is almost double the $5 billion that bankers previously said Qatar was targeting, Bloomberg said. The scale of the offering reflects strong appetite for Qatar risk. It has the region’s highest GDP per capita, almost no debt, almost $300bn in reserves and the joint highest credit rating in the Middle East with Abu Dhabi.

The issue follows Abu Dhabi’s sale last month of five-year bonds priced at 85 basis points.

Saudi Arabia has appointed bankers to advise it about a bond sale.

HSBC Holdings, JPMorgan Chase & Co., Mitsubishi UFJ and QNB Capital LLC are acting as coordinators on the Qatar Eurobond, Bloomberg reported.