Qatar pips Saudi in battle of the bonds

A debt issuance by Qatar has set a record for the largest emerging market bond so far this year.

The issuance, Qatar’s first since 2016, raised $12 billion (€9.76 billion) and attracted $53 billion of orders, according to reports.

The amount exceeded the sum raised by an international bond issued days earlier by Saudi Arabia, which drew $52 billion of orders. The Saudi issuance was seen as an attempt to spoil Qatar’s fund raising effort and was widely viewed as a continuation of the dispute between Qatar and its Gulf neighbours, several of which imposed an economic and diplomatic blockade on Qatar in June 2017.

According to Nick Wilson, chairman of the Gulf Investment Fund, Saudi Arabia’s surprise issuance was never likely to make its bonds more successful than Qatar’s.

“Global bond buyers are hungry for risk-related basis point advantage and Qatar is effectively at a rating-adjusted yield premium to Saudi,” he said. “Qatar is rated three notches higher than Saudi which should justify a much bigger yield discount than the current sub-15 basis points.”

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