Qatar National Bank, the Gulf state's largest lender, plans to issue a seven-year bond of at least $500mn in a swift one-day deal to take advantage of favourable conditions in the debt market.
The lender set final price guidance of 3.0% for the deal, tighter than price talk of 3.125% released earlier in the day, indicating healthy investor demand.
Final pricing could be 2 basis points above or below 3.0%.
Arranging banks said the order books were over $2bn in a sales document informing investors of final guidance, which was seen by Reuters.
QNB is expected to print a benchmark-sized deal, typically at least $500mn, 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 has also snapped up several banking stakes as part of a regional expansion strategy, and 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%.
The bond was bid at 2.4% yesterday afternoon, according to Thomson Reuters data.
The yield on the bond has fallen from nearly 2.6% last week.
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.
© Gulf Times 2013
