Global Arab Network | Qatar's Billion Global Bond Issue Assigned AA-

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Qatar's $7 Billion Global Bond Issue Assigned AA-

Global Arab Network - - George Haddad

Wednesday, 18 November 2009 10:17

Standard & Poor's Ratings Services said today it had assigned its 'AA-' senior unsecured debt rating to the State of Qatar's (AA-/Stable/A-1+) $7 billion global bond issue. The fixed-rate notes have three tranches: a $3.5 billion 4.0% tranche maturing Jan. 20, 2015; a $2.5 billion 5.25% tranche maturing Jan. 20, 2020; and a $1 billion 6.4% tranche maturing Jan. 20, 2040.

The proceeds of the bonds will help the State of Qatar's general financing, and will be used in areas such as contingency funding for entities that the state owns or controls, and infrastructure investments funding in and outside the hydrocarbon sector.

"The ratings on Qatar are supported primarily by the country's solid fiscal and external balance sheets, its prosperous economy and strong growth prospects, and its prudent long-term policies," Standard & Poor's credit analyst Véronique Paillat-Chayriguès said.

The ratings remain constrained by the geopolitical risks facing sovereigns in the Gulf region, limited disclosure on government assets, and institutional constraints which are higher than for other 'AA' rated sovereigns.

"If Qatar achieves its forecast growth rate, increases its general government net asset position, and makes progress on institutional reforms and economic diversification, this would have a favorable impact on the ratings in the coming years," Ms. Paillat-Chayriguès said. "Conversely, the ratings could come under downward pressure if regional geopolitical risks escalate, or if the government's asset position deteriorates sharply."

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