Qatar completes Middle East’s largest ever bond sale

Qatar has reportedly sold $9bn in Eurobonds, the biggest ever bond issue from the Middle East and its first sale in four years.

Bloomberg cited sources as saying the country borrowed across three maturities yesterday.

This included $3.5bn in five-year notes at 120 basis points over US treasuries, $3.5bn in 10-year bonds at 150 basis points over and $2bn of 30-year bonds at a 210 basis-point spread.

The amount was almost double the $5bn that sources told the new service Qatar was targeting.

“Qatar printed nearly double expectations but left pricing on the generous side,” GMSA Investment Ltd trader Angelo Rossetto was quoted as saying.

Following the issue, and a $5bn Eurobond from Abu Dhabi last month, Middle Eastern bond sales this year total almost $30bn.

Countries in the region are tapping the bond market to plug fiscal deficits cause by low oil prices. Qatar in particular is in need of funds as it engages in $200bn of infrastructure work in the buildup to its hosting of the 2022 FIFA World Cup.

The country’s budget deficit is expected to increase to 5.2 per cent of GDP this year, according to a median forecast of analysts by Bloomberg.

At a conference in Dubai yesterday, MEED director of content and analysis Ed James said the number of construction contracts awarded in Qatar in the first quarter had been hugely disappointing at 1,673.

“They now actually have less than Bahrain (1705) and it has come almost to a complete stop,” he said, according to local publication 7Days.

Union Investment Privatfonds GmbH senior money manager Sergey Dergachev told Bloomberg that Saudi Arabia would “have to offer a very generous premium” for its planned bond issue, following Qatar’s sale.