Commercial Bank, has successfully launched a senior unsecured five-year bond worth USD 500 million at a new price benchmark. The transaction was launched at the set spread of %2B175 bps over 5-year Mid Swaps and priced at a coupon rate of 2.00% and yield of 2.083%. The issue was also oversubscribed 3.8xThis transaction marked CBQ’s successful return to the US$ public markets since 2018 and effectively repriced CBQ’s funding curve down.Joseph Abraham, Group Chief Executive Officer of Commercial Bank 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 2023sAt 2.083% yield and 2.000% 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 transactionImpressive 40bps compression on the day with very little impact to the final orderbook.
This represents the biggest tightening on a conventional senior FI GCC bond since 2019Despite a busy market and two previous Qatari FI issuances in as many weeks, CBQ was able to attract close to 140 investors with very few dropping despite strong price revisions.Orderbook of $2.3bn before final book standing at $1.9bn, reflecting an 3.8x oversubscription despite the price tightening during the book build. The allocation statistics, by geography and investor type, are as per the below:Distribution by Geography:Europe35%MENA27%Asia20%UK16%Other2%Total100%· Distribution by Investor Type:FM / AM 33%BANK30%INSURANCE18%PB9%Pension. F / SWF6%Other4%Total100%