By Reuters
UBAI, (Reuters) - Qatar launched a $4-billion,
dual-tranche sukuk on Wednesday, its first Islamic bond
issue in nearly a decade and the largest sukuk deal from
the Gulf this year.
The world's top liquefied natural gas exporter took full
advantage of heavy global interest in high-grade Gulf debt
and strong demand for sukuk among the region's cash-rich
Islamic investment funds.
The five- and 10-year tranches will each be $2 billion in
size. Final profit guidance for the long five-year
portion, maturing in 2018, is at a spread of 115 basis
points over midswaps, and for the long 10-year tranche
maturing in 2023 at 155 basis points over midswaps, market
sources said.
These terms are tighter than revised guidance released on
Tuesday, thanks to investor orders totalling in excess of
$24 billion, the sources said.
"Qatari banks will likely put in large orders; some will
put surplus deposits to work while others will likely
leverage up given the zero-risk status of the issuer,"
said Akber Khan, director for asset management at Al Rayan
Investment in Doha.
"The Qatari sovereign has a history of being a savvy
issuer and appears to be taking advantage of the
extraordinary spread compression we've seen in GCC (Gulf
Cooperation Council) sukuk over the last 6 months."
Qatar normally doesn't issue debt in small amounts: it
printed a $5 billion, multi-tranche conventional bond last
November, and before that a $7 billion bond in 2009. It
had not issued a sovereign sukuk since 2003, when it
priced $700 million of seven-year paper.
The Islamic debt market has been resilient during the
latest phase of the euro zone crisis and most regional
deals so far this year have been in the form of sukuk.
Unrated Dubai issued a two-tranche $1.25 billion sukuk in
April, following Saudi Electricity Co's $1.75 billion
issue.
The issue size of Qatar's sukuk, which will be structured
under an ijara or lease format, was the maximum available
based on the assets secured to back it, which are believed
to be state-owned buildings and land. Final pricing is due
later on Wednesday.
HSBC, Standard Chartered, Deutsche Bank and local Qatari
lenders Barwa Bank and QInvest are bookrunners on the
transaction.