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Tribune News Network
Doha
Commercial Bank, Qatar’s first private bank, has successfully launched a senior unsecured five-year bond worth $500 million at a new price benchmark.
The transaction was launched at the set spread of +175 bps over 5-year Mid Swaps and priced at a coupon rate of 2 percent and yield of 2.083 percent. The issue was also oversubscribed 3.8 times. This transaction marked CBQ’s successful return to the US $ public markets since 2018 and effectively repriced CBQ’s funding curve down.
Commercial Bank Group Chief Executive Officer Joseph Abraham attributed the success to very positive views from investors on Qatar’s strong economy and fiscal buffers, and the strength of Qatar’s banking system.
Investors have positively viewed the strong execution of CBQ’s five-year strategy which has significantly improved the performance of the bank.
Some of the highlights of the transaction are negative 15bps new issue premium with Fair Value (FV) calculated at +190bps ahead of book-building based on the trading levels of CB 2023s. At 2.083 percent yield and 2 percent coupon, CBQ registered the lowest funding levels achieved on a US$ public transaction.
This is also the second-lowest coupon ever achieved by a Qatari FI issuer on a public transaction.
It shows impressive 40bps compression on the day with very little impact on the final order book that 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, Commercial Bank was able to attract close to 140 investors with very few dropping despite strong price revisions.
Order book of $2.3 billion before final book standing at $1.9 billion, reflecting a 3.8 times oversubscriptions despite the price tightening during the book build.
Doha
Commercial Bank, Qatar’s first private bank, has successfully launched a senior unsecured five-year bond worth $500 million at a new price benchmark.
The transaction was launched at the set spread of +175 bps over 5-year Mid Swaps and priced at a coupon rate of 2 percent and yield of 2.083 percent. The issue was also oversubscribed 3.8 times. This transaction marked CBQ’s successful return to the US $ public markets since 2018 and effectively repriced CBQ’s funding curve down.
Commercial Bank Group Chief Executive Officer Joseph Abraham attributed the success to very positive views from investors on Qatar’s strong economy and fiscal buffers, and the strength of Qatar’s banking system.
Investors have positively viewed the strong execution of CBQ’s five-year strategy which has significantly improved the performance of the bank.
Some of the highlights of the transaction are negative 15bps new issue premium with Fair Value (FV) calculated at +190bps ahead of book-building based on the trading levels of CB 2023s. At 2.083 percent yield and 2 percent coupon, CBQ registered the lowest funding levels achieved on a US$ public transaction.
This is also the second-lowest coupon ever achieved by a Qatari FI issuer on a public transaction.
It shows impressive 40bps compression on the day with very little impact on the final order book that 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, Commercial Bank was able to attract close to 140 investors with very few dropping despite strong price revisions.
Order book of $2.3 billion before final book standing at $1.9 billion, reflecting a 3.8 times oversubscriptions despite the price tightening during the book build.
