Qatari Diar

  • 30 May 2012
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Type of deal: Emerging marketsDeal: $1bn 3.5% July 2015; $2.5bn 5% July 2020Date of pricing: July 14 2010Bookrunners: Barclays Capital, HSBC, Qatar National Bank, Standard Chartered Bank, Royal Bank of Scotland

Qatari Diar cracked a new asset class in July 2010 when it sold the Middle East’s first ever government guaranteed bond. Despite a market still nervous about that region after Dubai’s debt moratorium in November the year before, the deal attracted a whopping $25bn, one of the largest ever for an emerging market issuer.

Barclays Capital, HSBC, Qatar National Bank, Standard Chartered Bank and Royal Bank of Scotland led the Aa2/AA issue.

Local and international buyers scrambled for exposure to Qatar, one of the Gulf’s strongest names through a $3.5bn fives/10s offering from Qatari Diar, a real estate developer owned by the Qatar Investment Authority.

The deal’s explicit government guarantee was key to its success — bond investors had been crying out for such a structure, although something similar had been used in the loan market earlier in the year. Qatar Aviation Lease Co (QALC) — newly set up to lease planes to Qatar Airways — signed a $650m three year debut loan guaranteed by Qatar in March. It was also a blowout, attracting over $2bn.

With the explicit guarantee of the bond in place, analysts were confident in using State of Qatar debt as the main price reference point, sending the deal’s yield plummeting, as planned. The government guarantee was granted to help Qatari Diar and affiliate Bawra finance themselves more efficiently and assist the state in developing projects.

But demand for this kind of paper from the Middle East was such that the spread between the sovereign and its guaranteed bonds was even tighter than in other regions, which typically print 50bp-100bp back of their sovereigns.

The guarantee structure allowed Qatari Diar to price the five year at 180bp over US Treasuries and the 10 year at 190bp over.

The liquid Qatar sovereign 2015s (sold in November as part of the $7bn three tranche fives/10s/30s offering) were trading at 140bp over Treasuries while the 2020s were trading at 145bp over as the new Qatari Diar notes were priced.

The bookrunners estimated that the curve was worth 18bp at five years and 10bp at 10 years, putting the new issue premium at no more than 22bp and 35bp respectively over the Qatar sovereign curve.

That was aggressive, given that other Middle East quasi-sovereign entities such as Mubadala, which carries an implicit guarantee from the Abu Dhabi government, were trading with a premium of around 60bp-65bp over sovereign paper.

Also striking was that Qatar sovereign’s own note had been sold at 185bp over Treasuries and its 10 year at 195bp over Treasuries.
  • 30 May 2012

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 417,761.51 1606 9.02%
2 JPMorgan 380,362.89 1737 8.21%
3 Bank of America Merrill Lynch 364,928.71 1322 7.88%
4 Goldman Sachs 269,252.76 932 5.82%
5 Barclays 267,252.43 1082 5.77%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 45,449.36 196 6.57%
2 BNP Paribas 38,734.80 217 5.60%
3 Deutsche Bank 37,615.10 139 5.44%
4 JPMorgan 34,724.19 118 5.02%
5 Bank of America Merrill Lynch 33,835.53 112 4.89%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 22,475.00 105 8.66%
2 Morgan Stanley 19,057.00 101 7.34%
3 Citi 17,812.08 111 6.86%
4 UBS 17,693.89 71 6.82%
5 Goldman Sachs 17,332.64 99 6.68%