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Wed 7 Nov 2012 05:12 PM

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Qatar's QNB launches $1bn bond

Gulf state's biggest bank by market value says bond is set to mature in February 2018

Qatar's QNB launches $1bn bond

Qatar National Bank (QNB), the Gulf Arab state's largest lender, launched a $1bn bond on Wednesday, lead managers said, its second debt markets foray this year.

The bond, due to mature in February 2018, launched at a spread of 145 basis points over midswaps, tighter than guidance indicated earlier in the day, as demand for the deal was strong.

Sources said order books reached $3bn ahead of the launch, and that final pricing and allocations were due later on Wednesday. The terms of the deal are not expected to change.

QNB, rated A+ by S&P, last tapped debt markets for a $1bn five-year bond in February, which was issued at 3.375 percent. The bond was yielding 2.1 percent on Wednesday morning, according to Thomson Reuters data.

Prices on the 2017 bond fell after the new upcoming issue was announced, down to a bid of 105.39 cents on the dollar from 105.4 cents on Tuesday evening, before recovering again later in the day.

QNB is 50 percent owned by sovereign wealth fund Qatar Investment Authority and seen as one of the most acquisitive banks in the region, holding stakes in regional lenders as it seeks to expand.

It is currently in talks to buy the Egyptian arm of Societe Generale.

QNB did not say what the proceeds of the bond sale would be used for, but will have raised nearly $4 billion from the debt and syndicated loan markets so far this year following the sale, after securing $1.8 billion from a loan in August.

The lender reported a 10.5 percent increase in third-quarter net profit, driven by increased interest income and a drop in loan impairments. Shares ended flat on Wednesday, but are trading 3.2 percent lower year-to-date.

Deutsche Bank, HSBC Holdings, Mitsubishi UFJ, Standard Chartered and QNB Capital are mandated bookrunners on the deal.

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