Over the past decade or so, western countries ceded growth and manufacturing to the east, permitting commodity prices to rise and extravagance to flourish. These nations felt rich. They stocked their harems with the best female slaves islamic money could buy. Now their magic flying, fucking, carpets are being tugged away and they don’t want to stop spending. Essentially, the Iron Bank of JP Morgan and HSBC has them hooked.
As such, their civilizations will now delve into the wondrous world of western finance, owing money to devils of the first magnitude. To be fair, it’s more like a demon owing the devil money, if I am being equitable to the analogous narrative.
Qatar just issued $9 billion in debt, the largest ever for the middle eastern country. Very soon, The House of Saud will whore their state run oil company, Aramco, at which point, shortly thereafter, oil will crest and topple over.
Consider this, if you will. Investment banks stand to make an enormous amount of money underwriting Aramco, as will the Sauds. Isn’t it possible the price of crude is being buoyed for exactly this purpose, to see the successful sale of shares?
Now the process begins of transferring that money back from east to west, with interest!
The country borrowed across three maturities, selling $3.5 billion in five-year notes at 120 basis points over U.S. Treasuries, the same amount in 10-year bonds at 150 basis points over Treasuries and $2 billion of 30-year paper at a 210 basis-point spread, according to a person familiar with the transaction. The amount is almost double the $5 billion that bankers close to the deal said Qatar was targeting.
The deal follows a $5 billion Eurobond from Abu Dhabi last month with Middle Eastern sales this year now amounting to almost $30 billion if Qatar’s is included. Energy-exporting nations are borrowing internationally following a halving of oil prices since 2014 which has forced some governments to raid reserves. Qatar is also in the second year of a $200 billion infrastructure upgrade ahead of hosting the 2022 soccer World Cup.
“It’s quite surprising they printed so much,” said Angelo Rossetto, a trader at GMSA Investments Ltd. in London, who bid for the bonds. “Qatar printed nearly double expectations but left pricing on the generous side.”
Abu Dhabi’s sale included a tranche of five-year debt at a spread of 85 basis points last month. This is the first sale in four years from Qatar, the world’s largest exporter of liquefied natural gas. The nation’s budget deficit will widen to 5.2 percent of national output this year, according to the median forecast of eight analysts surveyed by Bloomberg.
“The Qataris refused to cut their spending, investing and consumption and spent more cash than they generated,” said Lutz Roehmeyer, who helps oversee about $12 billion as director of fund management at Landesbank Berlin Investment, and bought the five-year bonds. “First they touched their reserves, waited for a slightly higher oil price and issued that much to refill the reserves again. So it was pent up demand for cash.”
A banker’s gonna bank.Comments »