QCB Issues Bonds and Sukuk Valued $910 Million
Qatar Central Bank (QCB) on Sunday offered government bonds and Islamic sukuk in eight tranches with different returns and terms, with a total value of $910 million.
According to data published on QCB’s website, the value of the 4 bond issues amounted to about $560 million. The value of the first tranche of bonds amounted to $164.56 million for a period of two years, with a return rate of 4.10%, while the value of the second tranche amounted to $82.28 million riyals, with a return of 4% and a period of three years.
The Central Bank also offered two bond issues, one worth $143.99 million for five years and a return of 4%, and the other one for $164.56 million for a seven-year period and a return of 4.10%, the QCB said.
According to the data, the outstanding balance of government bonds held by the QCB amounted to $17.12 billion while the outstanding balance of Islamic bonds reached $14.81 billion, Qatar’s federal bank said.
The CBQ also issued four issues of Islamic bonds with a total value of $350 million, the first for a period of two years with a value of $82.28 million and a return of 4.10%, and the second for $137.13 million for a period of 3 years and a return of 4%.
The third and fourth issues of Sukuk valued $75.42 million and $54.85 million respectively are being offered with a return of 4% each. The tenure for these two issues are five years and seven years respectively.
Bonds are known as a long-term public debt instrument that countries resort to in order to finance the budget deficit, while sovereign Islamic sukuk are a debt instrument issued by the state to raise funds that it uses to cover the deficit, and prove the right of ownership for its holders in the assets.
It may be recalled that in April this year, the QCB issued Government Bonds and Sukuk for tenors of 2-, 3-, 5-, and 7-years for QR 4.65 billion.
The issuance of the treasury bills includes $450 million for a tenor of two years with 5% interest, three issues – one each for $270 million – for three, five and seven years’ tenor for an interest rate of 4.8%, 4.75% and 5% respectively. The offered bids reached $3.83 billion.
Issuances Stable
Meanwhile, global ratings agency Fitch Ratings on Monday said that Qatar’s debt capital market (DCM) issuance, the third largest in the GCC after Saudi Arabia and the UAE, is expected to be broadly stable amid the government’s continued debt repayments and limited corporate DCM access.
Bank issuances are expected to continue as they replace upcoming maturities and strive to diversify their funding bases. Qatar’s DCM reached about $130 billion outstanding at end of first sixth months in 2024, same as in the corresponding period last year, with sukuk at 10% (Hi-2023: 13%).
Since the start of 2024, the diversity of issuance has increased, with the issuance of the first sovereign green bond in the GCC region, the first Qatari riyal corporate sukuk and a Formosa bond, Fitch Ratings said.
In H1 of 2024, sukuk issuance expanded by 122% y-o-y to $500 million, while bond issuance was up by 59% y-o-y to $12.4 billion. The QCB regularly issues Treasury bills and sukuk, which provides domestic Islamic banks a venue to invest their excess liquidity, Fitch Ratings added.
