Qatar's QNB raises $1.5bn from two-part bond sale

Popularity underscores investor demand for debt offerings from top-tier names in region
Qatar's QNB raises $1.5bn from two-part bond sale
By Reuters
Thu 24 Oct 2013 09:28 AM

Qatar National Bank (QNB), the largest listed lender in the Gulf Arab world, said it raised $1.5 billion from a two-part bond sale, underscoring investor demand for debt offerings from top-tier names in the region.

QNB, part-owned by the Gulf state's sovereign wealth fund, raised $750 million from a three-year floating rate note with a spread of 125 basis points over the three-month London Interbank Offered Rate (LIBOR).

The remaining $750 million was raised from a five-year fixed-rate tranche that offered investors a spread of 145 bps over mid-swaps and a coupon of 2.75 percent.

"The issue attracted strong interest from investors around the world which reflected their confidence in QNB group's financial strength and in the group's strategy for the coming years," the bank said in a statement late on Wednesday, adding that the deal was several times oversubscribed.

Proceeds from the debt sale will be used for general banking purposes, the statement added.

QNB has embarked on an aggressive expansion plan in recent years that saw the lender acquire Societe Generale's Egyptian operations last year and also buy banking stakes in Libya, Indonesia and Iraq.

The bank wants its international business to contribute around 40 percent of profit and 45 percent of total assets by 2017, Chief Financial Officer Ramzi Mari said in December.

It posted an increase of 14.3 percent year-on-year in its third-quarter net profit but the results fell short of analysts' expectations.

QNB's last international bond issue was a 200 million Swiss franc ($224.3 million) sale in May. The lender's last big debt sale was a $1 billion issue in November 2012.

The current issue was arranged by HSBC Holdings, Standard Chartered, J.P. Morgan Chase, Royal Bank of Scotland and QNB's own investment banking arm.

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