Thursday, 15 July 2010 at 20:06, Reuters, London
Qatari Diar's dual tranche $3.5 billion bond sale attracted combined orders of over $23 billion according to a lead manager, as investors scrambled to get their hands on state-backed paper from the Gulf Arab state.
Foreign investors are keen to buy into debt issues from Qatar, the Gulf country rich in natural gas reserves and whose economy is expected to show double digit growth rates this year and in the next three to five years.
The $1 billion five-year tranche sale from the property arm of Qatar's sovereign wealth fund attracted an order book of over $11bn. The bond yielded 3.5 per cent.
Diar's $2.5bn 10-year tranche received more than $12bn in orders, one of the lead arrangers on the deal said. The 10-year tranche carries a 5 per cent coupon.
"Qatar has got a pretty spectacular credit story to tell -- growth rates are strong. They are seen as a very sensible and smart issuer, and they've demonstrated that again here," said Spencer MacLean, a banker with Standard Chartered bank in London.
Joint lead managers on the sale were Barclays, HSBC, Qatar National Bank, RBS and Standard Chartered.
Asian investors bought 10 per cent of the five-year tranche and 12 per cent of the ten-year tranche from the issuer showing increased demand for Qatar issues from Asia. "If you rewind the clock to last November, the Asian orders for the five-year were 5 per cent, and 3 per cent for the 10-year. So demand has doubled for the five-year and quadrupled for the 10-year," Spencer said.
In November, Qatar sold $7bn in bonds in three tranches which attracted a heavily oversubscribed order book. Following the issue, the regional bond market remained shut for months after Dubai's debt troubles came to light.
Diar has been an active investor in real estate projects in the Gulf and abroad. Qatar, the world's largest exporter of liquefied natural gas, is ensuring its key property firms weather the global crisis, which has hit nearby Dubai hard, by pushing through defensive mergers and using Diar to invest in them.
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