Qatar launched a $10 billion three-part Eurobond sale that has attracted more than $25 billion of orders, as developing-nation borrowers start to issue again following last month’s turmoil in global markets.
The Gulf monarchy, which is the world’s biggest exporter of liquefied natural gas, rated AA- by S&P Global Ratings, launched $2 billion in five-year bonds, $3 billion in 10-year notes and $5 billion in 30-year debt. The shorter notes will pay a 300 and 305 basis-points premium over similar Treasuries, respectively, and the longer bond will return a 4.4% yield, all lower than the initial price talk.
That compares with a yield of 4.23% on Qatar’s $6 billion of notes maturing in 2049. Israel, rated the same as Qatar by S&P, issued $5 billion last week that included a 30-year portion paying 3.875%.
“Qatar is double-A rated and now offers yield which we could only dream of a couple months back,” said Carl Wong, head of fixed income at Avenue Asset Management Ltd. in Hong Kong.
Sovereign sales are resuming after the spread of the coronavirus outbreak and the plunge in oil prices all but closed developing bond markets for most of March. As well as Israel’s deal, Panama issued $2.5 billion and Indonesia raised $4.3 billion on Monday in its biggest-ever offering in dollars.
“Qatar has offered juicy spreads on all three tranches,” said Chirag Doshi, chief investment officer at Qatar Insurance Company in Doha, who will probably buy the bonds. “The issue is expected to generate favorable demand and will open the door for more regional bond sales.”