Qatar Petroleum (QP) and the US’ ExxonMobil, the sponsors behind the $8.6bn Barzan gas project, have sent out a request to proposals (RFP) for banks to advise on a potential bond issue that could be around $1bn.

Responses to the RFP are due by 17 October and a group of banks are expected to be chosen to lead the bond issue by the end of the month. The bond, along with bank loans and export credit agency (ECA) finance, are expected to reach financial close and be signed by the end of the year.

Banks including Qatar National Bank (QNB), the US’ Citigroup, and Japan’s Bank of Tokyo Mitsubishi (BTMU), Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho have been invited to pitch for the deal as they were some of the largest contributors to the project finance loans.

The Barzan project raised commitments of $6.6bn from 30 banks and several ECAs. The bank commitments are expected to be scaled back though in the next few weeks as the project does not require as much debt as it has been offered by the market. If the bond issue does occur, the banks will have to be scaled back even further.

The exact size of the various tranches on the deal will be determined once a final decision on the bond issue is made. The pricing on the bank tranche has been set though and will range from 130 basis points above the London interbank offered rate (Libor), to 200 basis points above Libor.

In addition to the banks pitching for the bond issue, the Barzan lending group also includes:

  • Al-Khalij Commercial Bank (local)
  • Apicorp (Saudi Arabia)
  • ANZ (Australia)
  • Bank of America (US)
  • BTMU
  • Barclays Capital (UK)
  • Citigroup (US)
  • Commercial Bank of Qatar (local)
  • DnB NOR (Norway)
  • Doha Bank (local)
  • International Bank of Qatar (local)
  • JP Morgan Chase (US)
  • HSBC (UK)
  • KfW (Germany)
  • Mizuho
  • National Bank of Abu Dhabi (UAE)
  • QNB (local)
  • Riyad Bank (Saudi Arabia)
  • Royal Bank of Scotland (UK)
  • Samba Financial Group (Saudi Arabia)
  • Siemens Financial Services (Germany)
  • Standard Chartered (UK)
  • SMBC
  • Union Bank of Qatar (local)

Switzerland’s Credit Suisse and Germany’s WestLB are lending on the ECA guaranteed tranche.

The following Qatari banks are lending on the Islamic tranche:

  • Barwa Bank
  • Masraf al-Rayan
  • Qatar International Islamic Bank
  • Qatar Islamic Bank