| DUBAI, March 19
DUBAI, March 19 Commercial Bank of Qatar
(CBQ) is in talks with banks about a potential
international bond issue that will most likely be denominated in
U.S. dollars, sources familiar with the matter said on Sunday.
If the deal goes ahead, CBQ would join a growing number of
banks from the region tapping the international debt markets
this year with the aim of improving capital reserves and
boosting capital ratios to counter the impact of lower
international oil prices.
CBQ, the Gulf Arab state's third-largest bank by assets, is
looking at a benchmark-sized transaction, which conventionally
means upwards of $500 million, the sources said.
CBQ declined to comment.
A U.S. dollar-denominated bond issue is considered the most
likely option, but the bank is also looking at issuing in
Chinese renminbi, one of the sources said.
In March last year, CBQ got shareholder approval to issue
bonds up to $1.5 billion under a euro medium-term note
programme. This envisaged the possibility of issuing bonds
denominated in a number of currencies including dollars, yen and
CBQ issued in June last year a $750 million five-year bond
through its subsidiary CBQ Finance, a special purpose vehicle
incorporated in Bermuda and established to raise capital for the
Qatari bank through bond sales.
That bond, arranged by Citi, HSBC, Morgan
Stanley and National Bank of Abu Dhabi, has a
3.25 percent coupon and was yielding 3.32 percent on Sunday,
Thomson Reuters data showed. The debt was issued under an
existing $5 billion euro medium-term note programme.
CBQ launched a five-year turnaround plan last November
following five consecutive quarters of falling profits.
By applying tighter underwriting standards and higher
diversification across sectors and countries, the bank’s plan
was aimed at reducing its ratio of non-performing loans, and
also at boosting earnings per share, return on equity, return on
assets and Tier 1 capital.
CBQ is rated A2 by Moody’s and BBB+ by Standard & Poor’s.
(Editing by Jane Merriman)