HSBC raises $1.3bn real estate finance in Qatar

HSBC has concluded one of Qatar’s most innovative financing structures for Al Waab City, acting as its Financial Advisor, at what is a challenging economic time for the markets.

Al Waab City is a mixed use development located in central Doha, covering 1.25 million square metres. On completion it will be home to 8,000 residents, as well as commercial, retail, hotel and leisure facilities which will be substantially completed in 2010.

HSBC was appointed as Financial Advisor by Al Wa’ab City, the Doha real estate project, that announced the closing of its innovative capital raising exercise. The company raised $1.3 billion of capital from debt, mezzanine and equity funding sources for the QAR 11.5 billion $3.2 billion project, based on the advice of HSBC.

Kapil Chadda, Head of Investment Banking in Qatar for HSBC commented, “This financing stands out due to the raising of such a large amount of capital, for a green-field real estate project in Qatar. The innovation stems from a unique combination of financing sources which are both conventional and Islamic and with a range of International, regional and local banks and investors”.

The company has raised $1 billion in senior debt on a fully underwritten basis which represents almost a third of the total value of the project. “This in itself is a remarkable feat in the challenging times in the debt markets and is a testament to the quality of the sponsors (Nasser Bin Khalid Group), the credit profile of Qatar in the GCC and the project itself” added Chadda. The remaining two thirds of the financing is coming from a mixture of equity and mezzanine finance.

HSBC acted as financial advisor to Al Waab City from its inception in 2007 and assisted the company in charting the way to raise financing, arranging a bridge loan and structuring, underwriting, book running and holding the senior loan. They have lent and invested in the project along with other banks and investors.

Sheikha Hanadi Al Thani, CEO of Al Wa’ab City added ““We very much appreciate the extraordinary efforts of HSBC as our financial advisor to organize this transaction in such difficult times”.

“The financing of this project is ground-breaking for the Middle East. It is the first time that senior debt and mezzanine finance, let alone one that is Shari’ah compliant, have been combined for a regional borrower alongside Equity investors, and the first time that this very strong combination of local, regional and international banks, sponsors and investors have come together in this way, all on the same day”, added Sheikha Hanadi.
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