Qatar’s Ministry of Finance has announced the issuance of green bonds totaling $2.5 billion, marking the first such issuance in the region. The bonds aim to fund environmentally friendly projects.
The bonds are divided into two tranches: a $1 billion tranche with a 5-year maturity priced at a 30 basis point spread over U.S. Treasuries, and a $1.5 billion tranche with a 10-year maturity priced at a 40 basis point spread over U.S. Treasuries.
Furthermore, this issuance represents the lowest spread ever recorded by any bond-issuing country in the Middle East, Central and Eastern Europe, and Africa.
Read more: Qatar Central Bank’s foreign reserves surge 5.2 percent to $67.9 billion in March
Oversubscription and investor interest
Additionally, the total subscription demand exceeded $14 billion, over 5.6 times the total issuance size. This further demonstrates broad and diversified interest from global geographic and institutional investors.
Investor confidence in Qatar’s sustainable finance framework
The successful subscription process reflects investors’ confidence in Qatar’s sovereign green financing framework. This framework was established to the highest global standards in sustainable finance. It provides investors an opportunity to participate in Qatar’s efforts to combat climate change and promote sustainable development, while also supporting the growth of the country’s sustainable finance sector.
Coordinating banks
Moreover, Credit Agricole, HSBC, JP Morgan, and QNB Capital were selected as the coordinators and primary issuance managers for structuring the green financing framework and the bond issuance. Barclays, Citigroup, Deutsche Bank, Goldman Sachs, SMBC Nikko, and Standard Chartered bank will also serve as joint bookrunners.
Improved sovereign credit ratings
Qatar has also significantly improved its sovereign credit ratings. Fitch has upgraded it to AA with a stable outlook, and Moody’s has upgraded it to AA2, also with a stable outlook. These are among the highest sovereign credit ratings globally.
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