Qatar Commercial Bank sets guidance for bond sale

DUBAI, Nov 10 (Reuters) - Commercial Bank of Qatar COMB.QA has set price guidance on benchmark five-year and 10-year bond issues, a banker familiar with the deal said on Tuesday.

Guidance on the five-year issue was set at mid-swaps plus 250-275 basis points (bps), while the 10-year subordinate bond issue has been set at mid-swaps plus 400 bps, the banker said, adding the transaction could be priced later today.

The bank has a $380 million loan maturing this month, according to financial statements on its website.

Gulf issuance of conventional as well as Islamic bonds this year has remained well below 2008 levels, but a growing appetite for emerging market debt has encouraged more bond issuance this quarter.

Qatar's third-largest lender by market value last week kicked off a series of roadshows in the United States to gauge investor appetite for the bond, which will be listed on the London Stock Exchange. [nL4143075]

Benchmark is generally deemed to be about $500 million.

A bond issue could be used to shore up the bank's capital position, analysts say.

"Commercial Bank had about $380 million to repay in November so one of the reasons to issue bonds could be the repayment of this loan," said Vishnu Kant, senior analyst at Sico Bank in Bahrain.

"Their Tier II capital level is already pretty good," he said.

Commercial Bank of Qatar, which is rated A- by Standard & Poor's and A by Fitch ratings, last came to the market in 2006 with a $500 million bond as part of a $1.5 billion Euro medium term note programme.

Morgan Stanley and Credit Suisse are organising the roadshow, according to Thomson IFR. Executives at the bank could not be reached for comment.

Investors have shown strong appetite for recent Qatar government entity bond sales. In July, a joint venture between Qatar Petroleum and Exxon Mobil Corp (XOM.N) sold about $2.3 billion in bonds to finance the expansion of LNG facilities.

A month earlier, state-controlled Qatar Telecommunications Co's QTEL.QA debut $1.5 billion bond was heavily oversubscribed.

Qatar's economy is expected to grow in real terms by 7 to 9 percent in 2009.

(Reporting by Rachna Uppal; editing by John Irish and David Cowell)