Qatar Real Estate Investment Company's USD 300 million Sukuk prices successfully

The transaction closed at a time when several other issuances out of the GCC were cancelled or delayed due to volatile international market conditions.

The final pricing of US$ LIBOR +73 basis points is very competitive and is inside the initial price guidance of +75bps, despite the challenging market conditions.

The Sukuk is rated 'A2' by Moodys and 'BBB+' by Fitch in line with the corporate ratings of Alaqaria.

The transaction appealed to both conventional as well as Islamic institutions, and attracted demand from investors across a wide geographic base. The Middle East accounted for 70% of the issue, Europe accounted for 27% and Asia 3%. Banks accounted for 82% of the transaction, Fund Managers 12% and Corporates 6%.

This is the first rated Sukuk for a Qatari corporate and the second corporate Sukuk ever to come from Qatar, following Alaqaria's unrated issue in 2006.

Commenting on the transaction, Sheikh Khalid Bin Khalifa Al-Thani, the Chairman and Managing Director of Alaqaria said: " It is a testament to the quality of the management team we have at Alaqaria that has undertaken a process of raising more efficient sources of capital from a diverse investor base by using innovative financing techniques" added Sheikh Khalid Bin Khalifa Al-Thani, the Chairman and Managing Director of Alaqaria.

"This sukuk is a very important benchmark for Alaqaria in terms of its future financing strategy. By getting two ratings from world class rating agencies, we have successfully reduced our borrowing costs by almost 50%, setting a new benchmark for the company. In addition, by distributing the issue so widely overseas, we have a lot of new investors who are now working with Alaqaria for the first time,"

added Mohammad Mandani, Alaqaria CEO.

Osama Abu Baker, the CFO concluded that "given the very strong pipeline of business that Alaqaria has from its key clients such as QP and other International Oil & Gas companies in Qatar, the need for growth capital, structured right and priced competitively was very important for us. Whilst we hit very choppy markets during our deal, we were very pleased by the support we received from a wide range of local, regional and especially new international investors, who all understood and supported the strategy and vision of the company. This resulted in what we consider to be a very good result, under challenging circumstances, which will be the platform from which we shall be building our future financing strategy."

Commenting on the transaction, Declan Hegarty, HSBC's Head of Debt Capital Markets in the Middle East, said:

"This was an important transaction, that will act as a benchmark for future Qatari corporate borrowers, and for the Islamic finance industry in Qatar generally. Amid very difficult global market conditions, the success of the issue is testament not only to the strength of Alaqaria's prospects and business model, but also to the distribution capabilities of HSBC."

HSBC was the sole arranger and sole bookrunner, Senior Co-Lead Managers were Masraf al Rayyan, Qatar Islamic Bank, Qatar International Islamic Bank and were joined by Co-Lead Managers Mashreqbank, Emirates Bank, National Bank of Abu Dhabi and Landsbanki.