DUBAI/DOHA: Qatar National Bank plans to issue a seven-year bond of at least $500m in a swift one-day deal to take advantage of favourable conditions in the debt market.
The lender set final price guidance of 3 percent for the deal, tighter than price talk of 3.125 percent released earlier in the day, indicating healthy investor demand. Final pricing could be 2 basis points above or below 3 percent. Arranging banks said order books were over $2bn in a sales document informing investors of final guidance.
QNB is expected to print a benchmark-sized deal, typically at least $500m, taking advantage of low interest rates to lock in longer-term funding which will help the bank extend its debt maturity profile. “It is not related to a political deal or buyout. My understanding is that it’s for general funding purposes only. They want to take advantage of the current conditions in terms of rates,” said a senior Doha-based banking source.
“The thinking seems to be that it’s better to go to the market now rather than wait for a potential liquidity squeeze down the road.”
QNB is one of the Gulf’s most acquisitive lenders, with ambitious expansion plans in the region and further afield. It completed the purchase of a majority stake in Societe Generale’s Egyptian arm for $2bn earlier this year. The bank said in December it was looking at a majority stake in one of the top 10 Turkish banks.
QNB last tapped the US dollar bond market in November when it priced a $1bn long five-year bond, maturing in 2018, at 2.125 percent. The bond was bid at 2.40 percent yesterday afternoon, according to Thomson Reuters data.
At initial guidance, the new bond was expected to offer a new issue premium of at least 25 bps, according to calculations by IFR Markets, a Thomson Reuters unit. Deutsche Bank, HSBC Holdings, JP Morgan , Mitsubishi, Standard Chartered and QNB itself were mandated to arrange the deal.
Reuters
