Qatar real estate firm plans to raise $800M

December 12, 2007

Qatar’s Barwa Real Estate said it was seeking a credit rating and looking to sell at least $800 million of Islamic bonds as well as global depositary receipts next year to fund expansion.Barwa, which operates according to Islamic law, bought a Paris hotel in October, has investments in Britain and Switzerland and is planning an 800m euro ($1.2 billion) development in eastern Europe.”It’s a 50:50 joint venture real estate development,” Chief Financial Officer Tamer Khedr said, declining to name the country.Barwa is working on about $3bn worth of projects in Qatar and is planning about $20bn more, according to a prospectus given to potential investors last month.

The company, which is raising an $800m one-year Islamic loan after borrowing $600m in August, is likely to sell at least $800m of Islamic bonds, or sukuk, in the second quarter to refinance debt, Khedr said.”We will seek more financing in the second half of next year, but we have not decided how much or what type,” he said.

Barwa is also considering raising funds by selling global depositary receipts by the end of next year, Khedr said.”The credit rating would put us on the financial radar of investors, reduce our cost of debt in general and boost our ability to bid for more viable businesses,” Khedr said.

Barwa is talking to all three international credit rating agencies and hopes to secure a rating by April, he said.Qatar’s government is rated Aa2 by Moody’s Investors Service and AA- by Standard & Poor’s. Fitch Ratings is the third agency.

Qatar’s government owns a 45 per cent stake in Barwa through state-owned property developer Qatari Diar. State-owned Qatar Airways and Qatar National Bank are also shareholders in the company.Barwa has mandated BNP Paribas, Gulf International Bank, The First Investor, JP Morgan, Standard Chartered and Unicorn Investment Bank to arrange its financing.

Investors linked to the Qatari government are scouring the globe for assets in which to invest windfall revenues from energy exports. Qatar has the world’s third-largest gas reserves and is the largest exporter of liquefied natural gas, which is gas chilled into a liquid state to make shipping easier.Barwa is expanding its international portfolio and bought the Royal Monceau hotel, which is near the Arc de Triomphe in Paris, in October.

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