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Qatar Petroleum grabs $12.5 bln in emerging market bonds record

Qatar Petroleum sold $12.5 billion in a jumbo four-tranche bond deal on Wednesday.

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According to a Reuters article written by Yousef Saba, Qatar Petroleum (QP), one of the world’s leading liquefied natural gas (LNG) exporters, sold $12.5 billion in a jumbo four-tranche bond deal on Wednesday. This is the first public bond sale and the biggest issuance out of emerging markets this year.

After total orders exceeded $41 billion, QP tightened the spreads across all four tranches by 30 basis points (bps), according to a document from one of the deal’s banks.

QP sold $1.5 billion in a five-year portion at 50bps over US Treasuries (UST), $3.5 billion in 10-year paper at 90 bps over UST, $3.5 billion in 20-year notes at 3.15% and $4 billion in 30-year Formosa bonds at 3.3%.

The 10-year paper and the Formosa bonds, which were offered in Taiwan by overseas borrowers and denominated in currencies other than the Taiwanese dollar, drew the highest interest, with over $12 billion each.

The bonds landed about 10-15 bps wider than the sovereign’s curve, which investors contrasted to the debt of Saudi oil behemoth Aramco versus Saudi state debt.

“The most obvious comparison to QP is Aramco which is roughly 10-15 bps wider than the sovereign. But QP contributes to 80% of Qatar’s budget versus 60%” said Zeina Rizk, executive fixed-income director at Arqaam Capital, for Aramco’s contribution to the budget of Saudi Arabia.

According to the prospectus for the bonds, QP, which provides one in every five LNG shipments globally, would utilize the revenues for operational and investment reasons, including its North Field expansion project.

According to a Reuters analysis of QP’s bonds prospectus, QP made a profit of 18.1 billion riyals ($4.90 billion) in the first quarter of 2021, up from the 13.3 billion riyals the year before.

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