In 2018, Qatar National Bank and Al Khalij Commercial Bank have debt to refinance — QNB’s $1bn, due in February, is the first up.
Qatar Islamic Bank, Doha Bank, Ahli Bank and Commercial Bank of Qatar have all been meeting fixed income investors with a view to printing bonds, though bankers have said that some of these meetings are routine for these banks at this time in the year.
But when it comes to bringing a new issue, the banks want the sovereign to go first. Indeed, the Qatar sovereign is rumoured to be looking at printing its own $9bn jumbo bond. That is the usual order in emerging market bonds whereby political turmoil — in this case Qatar's diplomatic spat with its neighbours — locks a country’s issuers out of the market. The sovereign jumps back in, reprices curves, celebration ensues and the next batch of issuers from the country find it easier to access the market.
But it is not the only play. In 2014, in the wake of EU and US sanctions, it was not the Russian sovereign that showed there was good investor demand for Russian bonds, it was ABH Financial, a privately-owned Russian bank. A swathe of Russian banks and corporates followed ABH's opener.
If Qatar’s banks want access to the international dollar market, they are more than capable of regaining it themselves. Qatar National Bank in particular, a banking behemoth in the country, is enough of a proxy for the sovereign to do the job.
QNB's bonds are this week trading around 135bp-140bp over swaps. That is around 40bp wider than where they were in the first half of the year before the diplomatic crisis within the Gulf erupted in June.
These are probably not palatable levels for QNB to borrow at but there is some argument that in a good week the bank could print inside its own curve. With no fresh primary issuance about, secondary curves may not be the definitive guide for pricing that they usually are.
If it all comes down to cost then QNB does not actually need public bonds. It can take out loans or do deals in private markets. It enjoys high liquidity and can wait for the price it wants to pay.
That means waiting for the sovereign. But even the sovereign need not do something as hefty as $9bn simply to reopen the market for its compatriot borrowers. A more modest benchmark would do the trick just as well.
But a Qatari bank is more than capable of reopening the primary issuance from the country, and that in itself should provide great comfort to investors eyeing redemptions in 2018.