Commercial bank of Qatar accomplishes economic objectives
Date
3/31/2024 8:13:15 AM
(MENAFN) On March 26, 2024, Commercial bank of Qatar successfully priced a USD 750 million Regulation S 5-year Bond with a coupon rate of 5.375 percent at a spread of UST+125bps. The issuance was oversubscribed by 2.4 times, indicating strong investor interest.
This deal marks Commercial Bank's return to the public international capital markets after a three-year hiatus since its last public issuance, a USD 700 million 5-year RegS Bond in May 2021. The success of this transaction, the largest since 2016, underscores the bank's credit strength and the demand for Qatari institutional paper among international investors.
Taking advantage of favorable market conditions, Commercial Bank announced the mandate on March 25, following recommendations from the joint lead managers (JLMs). A two-day execution strategy was adopted to engage international investors and refresh the bank's credit profile. The comprehensive deal marketing and previous non-deal marketing efforts were well-received by investors.
Due to strong interest and conducive market conditions, the decision was made to open books early on GCC Tuesday, with initial price talk (IPTs) set at UST +150bps. Given the bank's strong market following and recent GCC fixed-income supply, this spread was considered reasonable. The strategy proved successful as the order book quickly grew, driven by significant demand from Asian investors, and continued to build until London Open.
With an order book reaching USD 1.8 billion and of high quality, the JLMs decided to tighten pricing by 25bps (to UST +125bps) and launch the deal at USD 750 million in a single tranche.
Joseph Abraham, Group CEO of Commercial Bank stated: “Commercial Bank’s objectives for the transaction includes achieving the funding plan objectives for 2024 by raising benchmark-sized funding in the first quarter, achieving a diversified orderbook by geography and investor institution type, and appropriate credit spreads. The Bank exceeded all the objectives in this offering – in which we were able to upsize our issue size to USD 750million (from an initial target of USD 500million) and price the transaction at an attractive level. The deal also attracted high-quality and diversified orderbook comprised of some of the largest and most notable EM investors as well as real money accounts and sovereign wealth funds.”
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