CBQ Issues $600 Million Bond Under EMTN Program

Commercial Bank of Qatar (CBQ) has announced the successful issuance and pricing of a $600 million five-year senior unsecured bond under the Bank and its subsidiary, CBQ Finance Limited’s $5 billion European Medium-Term Note (EMTN) Programme.

The issue was arranged and offered through a syndicate of Joint Lead Managers comprising Citibank, Barclays, ANZ, Mizuho, UniCredit, QNB Capital, and Doha Bank.

To support the issue, representatives from CBQ embarked on a virtual road show with the Joint Lead Managers and presented to financial institutions, pension funds, asset managers and supranational bodies, and held one-to-one and group meetings.

Following the end of the Investor meetings, the transaction saw strong demand, with approximately $2 billion order book (an oversubscription by approximately x 4) allowing Commercial Bank to tighten the final spread. The bond was issued at a spread of 100 basis points over mid-swaps, with a 4.625% coupon and a final reoffer yield of 4.689% per annum.

The Bank achieved its lowest spread ever booked by robust international demand, CBQ said on Sunday.

Although the spread was tightened by 25 basis points the book remained strong reflecting strong investor appetite. The net proceeds of the issue will be used for general funding purposes to support the strategic growth plans of the Bank.

Very high-quality investors from the global community participated in this issue, with the majority of investors from the Middle East and North Africa region (MENA 54%) and Europe (22%), followed by Asia (17%) and offshore US (7%).

Diversified Investor Base

The investor base is diversified, including some of the world’s leading fixed income investors, with strong demand from fund managers, sovereign funds, banks and GCC institutions, CBQ said.

Parvez Khan, EGM, Treasury and Investments at CBQ), said that they were delighted by the investor response to their issuance under the EMTN Programme.

“The market demand and attractive pricing is a clear indication of the continuing confidence of international investors in the economic strength of Qatar, and is testament to Commercial Bank’s strategy, financial strength and prudent management,” he added.

Commercial Bank was the first Qatari entity to establish an EMTN Programme with a listing on the London Stock Exchange, and the first Qatari bank to issue a bond in the international capital markets. The bonds are listed on the Irish Stock Exchange and are rated A by Fitch.

This is the second bond issuance by CBQ since June this year. Rated A2 by Moody’s, A- by S&P and A by Fitch with stable outlook, the bank has successfully issued a 3-year tenor, $136.89 million Senior-Unsecured Bonds with a coupon of 4.9%. The Bonds were issued under its EMTN programme and are listed on the Euronext Dublin.