The Qatar Ministry of Finance announced the issuance of $2.5 billion worth of green bonds, the first of its kind issuance of the region aiming to fund environment-friendly projects. The bonds have attracted huge attention from investors and have a subscription demand exceeding $14 billion, which is over 5.6 times the total issuance size.
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.
The issuance represents the lowest spread ever recorded by any bond-issuing country in the Middle East, Central and Eastern Europe, and Africa.
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.
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.
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.
