Qatari banks raise over US$1 bil in privately-placed bonds — sources

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DUBAI (Oct 11): Qatar National Bank, the largest bank by assets in the Middle East and Africa, and Qatar Islamic Bank, the Gulf state's largest sharia-compliant lender by assets, have raised a combined US$1.3 billion in privately placed bonds, sources familiar with the matter said.

Private placements allow debt issuers to diversify their funding base by tapping different sources of cash than that provided by traditional bond investors. Private placements can also be executed quickly, as they require less paperwork than public debt issues.

QNB raised US$1 billion at the end of September with Standard Chartered arranging the issues, the sources said. One of the sources said the fundraising was split into 10 separate issues of US$100 million each.

Qatar Islamic Bank raised US$300 million earlier this month, also with Standard Chartered as the arranger, the sources said.

One of the sources said some of the investors in the private placements were based in Asia, with Malaysia and Indonesia accounting for a significant chunk of the investors in QIB's issues.

Qatar National Bank and Standard Chartered declined to comment. Qatar Islamic Bank did not immediately respond to a request for comment.

Qatari banks have for the most part weathered a crisis that erupted on June 5 last year when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic ties with Qatar and imposed economic sanctions on the country.

Al Khalij Commercial Bank raised US$500 million through a public bond earlier this month, demonstrating Qatari banks' ability to tap the international debt markets despite the Gulf rift.

QNB's chief executive Ali Ahmed al-Kuwari told Reuters this week that the bank's U.S. dollar liquidity was “excellent” and that it had no immediate funding need.

The bank, which is 50% owned by sovereign wealth fund Qatar Investment Authority, on Wednesday reported a 3.5% rise in third-quarter net profit.

Qatar Islamic Bank, considered one of the banks potentially most vulnerable to impact of the sanctions at the start of the crisis, has reported a rise in net profit in the second quarter of this year. It is expected to announce its third-quarter results next week.