15-09-2020
The Commercial Bank of Qatar ‘QCB’ announced that it has successfully completed the issuance of senior unsecured five-year debt notes worth USD 500 million at a new benchmark price. The transaction was launched at a set spread of 175+ bps above the average mid-swaps rate for five years, a coupon rate of 2% and 2.083% yield. The Notes issuance was oversubscribed 3.8 time.
This transaction marked CBQ’s successful return to the public markets trading of US Dollar since 2018 and effectively contributed to lower the CBQ’s funding curve.
Joseph Abraham, Group Chief Executive Officer of Commercial Bank attributed the success to the investors’ positive impressions about the Qatar’s strong economy and fiscal buffers as well as the strength of Qatari banking system.
Further, investors have positively viewed the proper implementation of CBQ’s five-year strategy which has significantly improved the performance of the Bank.
Below is some highlights on the transaction:
• Minus 15bps new premium with fair value (FV) calculated at 190bps ahead of book-building based on the trading levels of CB 2023s
• Yield of 2.083% and 2% coupon. CBQ registered the lowest funding levels achieved on a US$ public transaction
• The second lowest coupon ever achieved by a Qatari FI issuer on a public transaction
• Impressive 40bps compression on the day with very little impact to the final orderbook. This represents the biggest tightening on a conventional senior FI GCC bond since 2019
• Despite a busy market and two previous Qatari FI issuances in as many weeks, CBQ was able to attract close to 140 investors with very few dropping despite strong price revisions.
• Orderbook of $2.3bn before final book standing at $1.9bn, reflecting an 3.8x oversubscription despite the price tightening during the book build.