* Picks JPM, Citi, BofA, RBS and QNB Capital for bond
* Adds 30-year tranche to 15-year deal
* Revises price talk on 15-yr bond to 230 bps over 10-yr UST
* Qtel second Gulf borrower this week to raise long-term
(Adds updated terms, comment)
DUBAI, Jan 23 Qatar Telecom plans to
raise $1 billion from a bond sale on Wednesday, the second Gulf
Arab borrower this week to benefit from low borrowing costs to
secure long-term funding.
The majority state-owned company added a 30-year tranche to
a 15-year bond announced earlier in the day, because demand -
particularly from international investors - was so strong,
Gulf companies are taking advantage of tightening spreads by
raising money from the bond market to meet their expansion and
Qtel has been raising stakes in its subsidiaries, benefiting
from gas-rich Qatar's healthy financial position at a time when
other telecom companies are not doing deals. It increased its
stake in Iraqi telco Asiacell and Kuwaiti unit Wataniya
The 30-year maturity appeals to U. S. insurers and pension
funds, looking to buy and hold corporate debt for the long run.
"There is a lot of interest from non-GCC (Gulf Cooperation
Council) institutional investors," said one regional banker who
declined to be identified.
"It is the right move by both issuers as there is demand,
and it is a bargain for them," he said, referring to an
oversubscribed bond from Dubai on Tuesday.
The sovereign also added a 30-year portion to that deal, and
secured tight pricing due to strong demand. International
investors were allocated 88 percent of the longer-dated paper.
Strong demand allowed Qtel, rated A by rating agency
Standard & Poor's, to tighten price guidance on its 15-year bond
to 230 basis points over U.S. Treasuries, from 250 bps. Guidance
for the 30-year portion was set at 180 bps over 30-year U.S.
Both tranches will be capped at $500 million.
The company's last bond, a $1 billion long 10-year issue in
December, was oversubscribed.
The 3.25 percent 2023 maturity was bid at
99.8 cents on the dollar on Wednesday at 0600 GMT, to yield 3.26
percent. Yields have narrowed 5 bps since Monday, according to
Thomson Reuters data.
As one of the region's most acquisitive telcos, Qtel has
expanded into more than 16 countries in the past decade.
It has hired J.P. Morgan Chase to advise it on a
potential bid for Vivendi's Maroc Telecom, a stake
nearly worth $6 billion based on current market price, sources
told Reuters earlier in December.
RBS, Bank of America Merrill Lynch, J.P.
Morgan, Citigroup Inc and QNB Capital are joint
lead arrangers and bookrunners for Qtel's latest bond deal.
(Reporting by Rachna Uppal and Mala Pancholia; Editing by Amran
Abocar and Louise Heavens)