The Gulf Arab state of Qatar is planning to issue Islamic bonds, or sukuk, for the first time in nearly a decade, as it seeks to take advantage of global demand for safe havens and sharia-compliant assets amid market uncertainty.
Qatar has mandated banks for investor meetings in Kuala Lumpur and Singapore starting on July 9, arranging banks said on Thursday, and a dollar-denominated sukuk issue may follow subject to market conditions.
The world's top liquefied natural gas (LNG) exporter last tapped debt markets with a $5bn conventional multi-tranche deal in November, but it has not issued a sukuk since 2003.
"Qatar is an extremely well-known name in the bond market, and its existing bonds are very liquid and trade frequently, so appetite, particularly from international investors for Qatari paper is huge," said Chavan Bhogaita, head of the markets strategy unit at National Bank of Abu Dhabi.
"In addition, the rarity value of having sukuk paper from a blue-chip issuer such as Qatar sovereign will certainly help to ensure a very healthy order book."
The AA-rated borrower is looking to tap solid demand from abundant Islamic and non-Islamic liquidity in the wake of successful recent deals from the region.
Earlier this week, Emirates Islamic Bank, a unit of Dubai's largest bank, received $5bn in orders for a $500m sukuk. About 30 percent of the deal was allocated to Asian accounts.
And last week, deals from the Bahrain government and Dubai's Majid al Futtaim Holding were substantially oversubscribed, and tellingly, indicated a growing international bid for regional debt.
Qatar has hired HSBC Holdings, Deutsche Bank, Standard Chartered and local lenders Barwa Bank and QInvest to arrange the investor meetings.
Plans for a sukuk were announced on the same day that London's latest, and most glitzy, skyscraper, the Shard, in which Qatar is a majority investor, opens.