Qatar’s state-owned Qatar Petroleum (QP) raised $12.5bn via a jumbo four-tranche bond offering that includes a 30Y Formosa bond. The four-part issuance is the first by the world’s top liquefied natural gas (LNG) supplier. This is also the largest deal in APAC and Middle East since the Saudi Government issued a three-trancher worth $12.5bn in September 2017.

The bonds have expected ratings of Aa3/AA-/AA- and booked orders of over $26.6bn, 2.1x the issue size. The notes have a Change of Control (CoC) put at par if the State of Qatar ceases to own and control (directly or indirectly) 100% of the economic and voting rights in the issuer. The bonds also have a 1 month par call on the 5Y, 3 month par call on the 10Y, 6 month par call on the 20Y & 30Y. Proceeds will be used for operational and investment purposes which will include its North Field expansion project. According to Reuters, the bonds landed roughly 10-15bp wider than the sovereign’s curve. Zeina Rizk, executive fixed income director at Arqaam Capital said, “The most obvious comparable 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% (Aramco’s contribution to Saudi Arabia’s budget)”. QP’s 2026s, 2031s, 2041s and 2050s were priced 8-16bp wider vs. Qatar’s dollar bonds of similar maturities.

The gas supplier posted a profit of QAR 18.1bn ($4.9bn) in 1Q2021, up 36% YoY despite slightly weaker revenues of QAR 24.3bn ($6.7bn).

Qatar Petroleum’s newly issued bonds were trading mixed:

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