Posted on October 10, 2013

Al Khalij Commercial Bank (al khaliji) Q.S.C., rated A- by Fitch with stable outlook, has announced the successful pricing of its debut U.S.$ 500 million Senior Unsecured issuance under its newly established U.S.$ 750 million Euro Medium Term Note Programme. The transaction was issued at 99.575% with a coupon of 3.250% and a yield of 3.343%. BNP Paribas, HSBC, QNB Capital and Standard Chartered Bank acted as Joint Arrangers and Joint Lead Managers on the transaction.

Chairman H.E Sheikh Faysal Bin Hamad Al Thani

The benchmark RegS transaction, which effectively re-opened the conventional Financial Institution credit markets in the GCC region, came on the back of an effective marketing strategy which was undertaken by the Bank’s senior management and Joint Lead Managers. The global roadshow targeted fixed income investor meetings in the key Regulation S financial centers (London, Singapore, Hong Kong, Dubai and Abu Dhabi).

After the Asia and Middle East roadshow meetings were completed, al khaliji came out with initial price guidance of MS +195bps to investors. The orderbook quickly gained significant momentum. As the meetings in London progressed, the orderbook grew further and reached U.S. $ 2.5bn which allowed syndicates to announce that books would go subject same day for London and US offshore accounts while they would go subject on Wednesday October 9th at 10 am in Asia/Middle East. Al khaliji subsequently released official price guidance at 8 am London at MS+180bps, 15bps tighter than the initial price thoughts.

 

Robin McCall

Despite the competing supply in the market, al khaliji’s transaction gathered significant interest from the fixed income investor community globally as the Bank was able to effectively introduce investors to its credit story.

The orderbook ultimately closed at U.S.$ 3.5bn, representing 7.0% oversubscription, from more than 230 orders. The  interest in the transaction came from a high quality and geographically diverse investor base. al khaliji was one of the few credits to emerge post the summer lull and achieve a majority allocation outside of the MENA region. Furthermore, the orderbook quality was excellent with the participation of several real money accounts.

More specifically, the transaction was allocated to investors across the Middle East (42%), Asia (18%), Europe (37%) and US Offshore (3%). In addition, the types of accounts were also well balanced, with Funds (52%), Banks (28%), Private Banks (10%) and Insurance (10%) investors anchoring the orderbook.

Robin McCall, al khaliji’s Group Chief Executive Officer added: “We are delighted to effectively engage with the global fixed income investor community and introduce them to  al khaliji’s credit story. The positive feedback has been overwhelming, as evident by the 7.0x oversubscribed orderbook and the tighter pricing. It is pleasing to see that the bond was well received by a geographically diverse investor base. The outcome of the transaction is a testament that the Bank has the right strategy and will allow al khaliji to continue to support our ambitious growth plans and support the infrastructure development in our home market in Qatar.”

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