March 29, 2018 / 12:29 PM / a month ago

UPDATE 1-Mannai Corporation set to break Qatar public bond impasse

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LONDON, March 29 (IFR) - Qatar’s Mannai Corporation has hired banks to arrange investor meetings ahead of a potential debut bond offering denominated in U.S. dollars, a document from one of the banks showed.

Should it go ahead, the deal would be the first public debt issuance by a Qatari entity since the beginning of a diplomatic rift in the Gulf last June, when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut ties with Doha accusing it of supporting terrorism, a charge that Qatar denies.

Mannai Corporation has hired Bank of America Merrill Lynch as global coordinator for the planned bond, which would be a senior perpetual bond non-callable for five years. Other banks arranging the deal are Nomura and Standard Chartered, the document showed.

Meetings with investors will take place in Europe and Asia starting from April 4, according to the document.

Mannai, which is 66 percent owned by entities representing the Qatar government and royal family, has international businesses in the IT, retail and automotive sectors.

Earlier this month the company, which is listed on the Qatari stock exchange, announced it had approved the issue of bonds of up to $600 million which would be used for general corporate purposes, including the refinancing of existing debt.

Qatari corporates, as well as banks and the sovereign itself, have been active borrowers in the international debt markets since a slump in oil prices in 2014 hit the Gulf’s economies.

But since the diplomatic crisis started last year, Qatari borrowers have not issued international public bonds to avoid paying a price premium.

Qatari banks have over the past few months issued hundreds of millions of dollars in private placements outside the mainstream bond markets to refill their coffers.

Banks and corporates have been waiting for the government to issue a dollar bond – a move it has been considering for months – in order to price their own debt against the benchmark set by a sovereign sale.

Reporting by Sudip Roy; writing by Davide Barbuscia; Editing by Elaine Hardcastle

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