Qatar Returns to International Bond Markets Amidst Fiscal Deficit
Qatar has returned to international bond markets for the first time in nearly ten months, offering two tranches of USD-denominated debt as it grapples with a fiscal deficit that hit nearly decade-high levels.
The Ministry of Finance priced a 5-year bond at 85 basis points over US Treasuries, yielding roughly 5.67%, alongside a 10-year tranche at 95 basis points over, coming in around 5.91%. Both are set to list on the London Stock Exchange.
The deficit that prompted Qatar's return to international markets ballooned to 21.2 billion riyals (approximately $5.8 billion) in Q2 2026, marking the largest quarterly shortfall the country has seen in nearly a decade.
The culprit behind this is straightforward: the US-Iran conflict has effectively choked off traffic through the Strait of Hormuz, leading to a near-90% drop in Qatar's LNG shipments from roughly 20 million tons per quarter before the conflict to less than 2 million tons in the April through June period.
Revenue fell by approximately 30% year-over-year as a result. Government spending, meanwhile, stayed roughly flat.