Qtel mandates six banks for possible bond issue

December 10, 2012 - 1:03:36 am

DUBAI: Qatar Telecom (Qtel) has mandated six banks for a possible benchmark-sized dollar-denominated bond, lead arrangers said on Thursday, in what would be the majority state-owned operator’s first bond sale since 2010.

Qtel picked Barclays Plc, HSBC Holdings, Mitsubishi UFJ Securities, Mizuho Securities, Morgan Stanley Inc and QNB Capital as lead arrangers and bookrunners for the deal.

Qtel has been raising stakes in its subsidiaries, taking advantage of the gas-rich Gulf state’s healthy financial position at a time when other large telecom firms are shying away from deals. It increased its stake in Iraqi telco Asiacell and Kuwaiti affiliate Wataniya this year.

Benchmark-sized is typically at least $500m, and the sale will be open to qualified institutional investors in the United States as it will be 144a-compliant. The proposed bond will be issued by Qtel International Finance, a fully-owned subsidiary of Qtel, which will guarantee the new issue.

Roadshows kick off on December 9 in the United Arab Emirates before meetings in London, Hong Kong, New York, Singapore and Boston, concluding on December 11. 

Qtel, rated A by Standard & Poor’s, last tapped global debt markets in the fourth quarter of 2010 to raise $2.75bn from a heavily-oversubscribed sale. Yields on its existing bonds have fallen significantly, reducing Qtel’s borrowing costs.

Its $1bn 4.75 percent bond maturing 2021  was bid at 112 cents on the dollar on Thursday, to yield 3.08 percent, according to Thomson Reuters data.

The $1bn 3.375 percent bond, maturing 2016 , was yielding just 2.2 percent. The remaining $750m portion, issued at five percent and due 2025  was yielding 3.9 percent. Qtel reported a 74-percent rise in third quarter profit in October after completing a sale and leaseback of towers in Indonesia and on the back of higher domestic revenues.