Saturday, Nov 21, 2009
(This story was originally published Thursday.)
By Alex Delmar-Morgan
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Qatar's $7 billion sovereign bond this week is likely to trigger further debt issuance from companies in the gas-rich state, as bank lending remains tight and the need for capital increases, a senior Credit Suisse executive said.
"There is strong demand from international investors for quality issuers across the Middle East," Adel Afiouni, co-head of global securities for Credit Suisse in the Middle East and North Africa (MENA) told Zawya Dow Jones in a phone interview late Wednesday. "This will pave the way for more issuers including corporates."
Credit Suisse jointly coordinated the Qatari government's $7 billion bond sale - the region's largest sovereign debt issuance. Broken down, $3.5 billion of the paper will mature in 2015; $2.5 billion will come due in 2020; and the final $1 billion tranche will mature in 2040.
Demand for the note meanwhile was huge, with nearly $30 billion worth of orders.
Dutch bank ING this week said that total sovereign issuance from emerging markets in 2009 has hit record levels at $93 billion.
Conventional bond issues in the oil-rich Arab Gulf states have picked up in the second half of the year as economic fundamentals improve--coupled with recovering asset markets--against the backdrop of constrained bank credit and frozen IPO markets in the region.
Afiouni said Qatar's government bond would set a benchmark, allowing other companies to issue bonds at a higher interest rate.
"The decision to go for three tranches was to meet investor demand but also to build benchmarks across the yield curve. A Qatari corporate will most likely come at a spread that is higher than the Qatari government," he said.
-By Alex Delmar-Morgan, Dow Jones Newswires; +9714 374 8044; alex.delmar-morgan@dowjones.com
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
21-11-09 0552GMT