Qatar sovereign boosts confidence at a price
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Qatar sovereign boosts confidence at a price

Author: Nigel Dudley

Issuer: State of Qatar

Amount: $1.4 billion

Type of issue: Eurobond with 144A eligibility

Payment date: June 29, 2000

The growing international market in Middle East sovereign bonds took a further step towards maturity when Qatar raised $1.4 billion with a 30-year dollar issue in June. It was the first regional issue with a maturity of more than 10 years and the largest single-tranche Eurobond.

The bond, lead-managed by Morgan Stanley Dean Witter and Goldman Sachs and priced at 385 basis points over the comparable US treasury, also established Qatar as one of the leading Middle East sovereign borrowers. This has built on the success of the $1 billion sovereign raised last year and the $1.2 billion bond for Ras Laffan Natural Gas (RasGas) in 1996. Until now, the Middle East market has been dominated by Tunisia, which is well established in the samurai market, and Lebanon, which in June completed a $500 million, five-year Eurobond.

The issue was also important in reinforcing the growing confidence of the international rating agencies in Qatar. Although the long-term prospects, based on 300 trillion cubic feet of natural gas reserves, are healthy, there had been concern about how maturing international debt would be repaid.

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