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Qatar unveils $5.5b, 5-year loan into syndication

Dubai/London - The five-year loan is smaller than the amount of up to $10 billion which bankers said last month that the government aimed to borrow.

The government of Qatar has invited banks to provide it with a $5.5 billion loan, sources aware of the matter said on Tuesday, as Doha became the latest Gulf government to seek funds with its finances pressured by low energy prices.
The five-year loan is smaller than the amount of up to $10 billion which bankers said last month that the government aimed to borrow. The finance ministry did not respond to a telephone call from Reuters seeking comment.
Qatar, the world's top liquefied natural gas exporter, is one of the richest countries in the Gulf but it has still projected a budget deficit next year after gas prices fell.
The loan is important to Qatari financial markets because it will, temporarily at least, reduce the amount of domestic borrowing which the government has to conduct, and thus relieve upward pressure on local money market rates.
The Qatari riyal fell sharply in the forward foreign exchange market last week as traders worried that Doha might have trouble agreeing with banks on the terms of the loan.
Marketing of the loan deal will close in the third week of December, sources said. One said the interest rate on the loan would be between 85 and 95 basis points over the London interbank offered rate.
Fewer T-bills sold
Meanwhile, the Qatari central bank again sold fewer Treasury bills than planned at its monthly auction on Tuesday in what bankers believe was a sign of tighter liquidity due to low energy prices.
The central bank sold a total of QR1 billion ($275 million) of three-, six- and nine-month bills. In a statement last week, it had said it planned to sell QR4 billion of bills.
It also sold fewer bills than planned in its October and November auctions. Bankers in the Gulf say a reduction in fresh oil and gas revenues flowing into bank deposits has been pushing up money rates around the region.
However, Qatari central bank Governor Shaikh Abdullah bin Saud Al Thani said in mid-November that he was comfortable with liquidity levels in the banking system and did not see any need for intervention in the money market ahead of a possible US interest rate hike. - Reuters

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