June 20, 2019 / 1:21 PM / 6 months ago

EXCLUSIVE-HSBC gets top adviser role in Qatar for first time since Gulf row - sources

DUBAI/DOHA, June 20 (Reuters) - HSBC has been hired by a state-controlled port operator in Qatar, QTerminals, to coordinate a $500 million loan, sources familiar with the matter said, securing its first mandate as top adviser for a deal in Qatar since a regional rift between Doha and its neighbours erupted.

The London-listed bank — along with other lenders — was caught up in Qatar’s dispute with its neighbours Saudi Arabia, United Arab Emirates, Bahrain and Egypt, which in 2017 cut diplomatic and transport ties with Qatar accusing it of financing terrorism, a charge Doha denies.

Along with other banks, it side-stepped high-profile Qatar deals in the aftermath of the diplomatic crisis and prioritised business in Saudi Arabia, where it has a strong presence, as the kingdom promised a slate of deals as part of its efforts to open and transform the economy in an era of lower oil prices.

As a result of that, HSBC has not arranged any bond deals out of Qatar since the crisis began in 2017, according to Refinitiv data, after having been at the top of bond league tables.

Though it has participated in Qatari loan transactions over the past two years, it never won lead roles, and its ranking in the local bank debt market has fallen.

But after missing out on profitable mandates, like Doha’s $12 billion sovereign bond issuance, the lender has been seeking to regain its foothold in Qatar, sources familiar with the matter said.

QTerminals did not immediately respond to a request for comment.

HSBC, which declined to comment, has been appointed as sole coordinator for a $500 million five-year bank facility for the company, in charge of developing and operating Qatar’s Hamad Port, and it has recently approached other lenders for the transaction, said the sources.

LEAD ROLE

The bank has led almost every sovereign bond issue in the Gulf over the past few years, as governments in the region increased their dependence on debt to refill budget deficits caused by a drop in energy prices.

In its latest bond this year, a jumbo $12 billion debt sale, Qatar hired almost the same group of banks that arranged its bond issue last year, in what a source at the time said was a demonstration of the country’s commitment to its existing partners.

Those banks included Standard Chartered, Credit Agricole, and four banks with Qatari investment: Barclays, Credit Suisse, Deutsche Bank and Qatar National Bank. None of these banks has arranged Saudi Arabia’s recent bond issues.

Over the past few years HSBC has consolidated its presence in Saudi Arabia, as the kingdom opened up to foreign investors as part of economic reforms pushed forward by its new crown prince, Mohammed bin Salman.

It was one of the banks appointed to lead state-owned giant Aramco’s debut international bond this year, and had been previously mandated as an adviser for the company’s initial public offering, which is now expected to take place between 2020 and early 2021. (Reporting by Davide Barbuscia and Eric Knecht Editing by Keith Weir)

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