DUBAI: Qatar plans to raise at least $1.5 billion from a tri-tranche dollar bond sale on Tuesday, adding a 30-year portion late in the deal, according to market sources.
Guidance for the long five-year tranche maturing in January 2017 was issued at 225 basis points over US Treasuries (UST), and 262.5 bps over UST for the long 10-year tranche maturing in 2022, according to a document from lead banks seen by Reuters.
Both tranches will be benchmark sized, it added, meaning at least $500 million each.
A third benchmark size tranche was given initial price guidance of 25 basis points over benchmark 10-year USTs, according to a market source.
Qatar's five year credit default swaps or the cost to insure sovereign debt, were bid at 125 basis points mid-morning Tuesday in New York, data from Market showed. "This is likely to be a jumbo-sized transaction
In the current climate, dominated by volatility and nervousness, investors are likely to welcome the chance to buy a credit as solid as Qatar sovereign to add a degree of stability to their portfolios," said Chavan Bhogaita, head of markets strategy unit at National Bank of Abu Dhabi.
Qatar's bond will be structured under the 144a format, meaning it is open to institutional investors in the United States.
Market sources had indicated the lead arrangers were marketing a 30-year tranche, which can appeal to pension funds and insurance portfolios.
Citi, J.P. Morgan Mitsubishi UFJ, Qatar National Bank and Standard Chartered are the lead managers on the transaction.
The world's top liquefied gas exporter concluded investor meetings in New York on Monday, having also undertaken road shows in London last Friday.
Qatar's last global bond was a three-tranche, $7 billion issue in November 2009, just before Dubai's debt crisis broke, shutting regional bond markets for months.
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