By Laura Cochrane and Haris Anwar Nov. 18 (Bloomberg) -- Qatar’s bonds rose after the largest-ever sale of debt by an emerging-market government received $28 billion of orders, four times the amount issued. Qatar’s $3.5 billion of five-year bonds, half the total $7 billion sale, advanced to 100.2 cents on the dollar from an issue price of 99.87 cents, according to ING Bank NV data on Bloomberg at 5:05 p.m. in Doha. The emirate’s $1 billion of 30- year bonds rose 3 percent to 102.8 cents, according to prices provided by DZ Bank AG. “This is the largest debt deal from an emerging-market sovereign to date,” said Fabianna Del Canto , syndicate manager at Barclays Capital, a lead arranger for the sale, in London. “Qatar has firmly established itself as the premier borrower in the region.” Qatar, the world’s biggest exporter of liquefied natural gas, will use the bond proceeds to provide “contingency funding” for state-owned companies, pay for infrastructure projects, and invest in the international oil and gas industry, according to the bond sale prospectus obtained by Bloomberg News. The Persian Gulf emirate is spending billions of dollars diversifying its economy with acquisitions of stakes in London- based lender Barclays Plc and German carmaker Volkswagen AG. ‘Strong Appetite’ Middle East borrowers will sell as much as $18 billion of international bonds in 2010, Luis Costa , an emerging markets debt strategist at Commerzbank AG in London wrote on Nov. 11. Commercial Bank of Qatar, the country’s second-biggest bank by assets, sold $1.6 billion of bonds on Nov. 10. Dubai last month raised $1.93 billion through the biggest Islamic bond sale from the Gulf region this year, while Tourism Development & Investment Co., a state-owned developer of hotels in Abu Dhabi, raised $1 billion from a five-year Islamic bond issue. “There remains very strong appetite for the region,” said Neil Slee , director of debt syndicate for Eastern Europe, Middle East and Africa at Credit Suisse Group AG, which was one of the lead arrangers for the deal. “It’s a reflection of market confidence in the Qatari credit story” that it was able to close the largest-ever transaction from an emerging market issuer, he said. Qatar’s five-year bonds traded at a yield of 3.81 percent, compared with Dubai’s dollar-denominated Islamic bond with a similar maturity at 6.24 percent. Dubai Dubai, which suffered the worst in the Middle East from the global financial crisis, is struggling to refinance its debt after its government related companies earlier borrowed more than $80 billion to transform its economy into a tourist and financial services hub. Qatar is rated Aa2 by Moody’s Investors Service and AA- by Standard & Poor’s. Dubai is not rated. In addition to the five-year and thirty-year bonds Qatar issued $2.5 billion of 10-year bonds to yield 1.95 percentage points more than Treasuries. Qatar’s sale topped the $5 billion that Venezuela issued in October, according to ING Groep NV. Qatar’s benchmark DSM 20 Index was the third best performer in the world today, surging 2 percent at the close in Doha. The measure has gained 3.5 percent this year, compared with a jump of 74 percent in the MSCI Emerging Markets Index . Standard & Poor’s Ratings Services assigned an AA- rating to Qatar’s bond issue. “The ratings on Qatar are supported primarily by the country’s solid fiscal and external balance sheets, its prosperous economy and strong growth prospects, and its prudent long-term policies,” S&P’s credit analyst Véronique Paillat-Chayriguès wrote in a note today. Qatar Economy Qatar’s economy is expected to grow 9 percent this year and 16 percent next year, ruler Sheikh Hamad Bin Khalifa Al-Thani said on Nov. 3, according to state-run Qatar News Agency. The country is the holder of the world’s third-largest natural gas reserves and a member of the Organization of Petroleum Exporting Countries with 720,000 barrels a day of oil output. Qatar’s 2019 bonds are “cheap relative to ratings,” which is why he holds them, said Peter Eerdmans , head of emerging- market debt at Investec Asset Mangement Ltd. in London. The emirate’s 10-year paper is trading around 185 basis points above Treasuries and the “fair value” for sovereigns with rating in the AA- area is 100 basis point, Eerdmans, who overseas $950 million in assets, said in an interview. The low risk and the better prospects of cash flow generation are “alluring” investors to the Middle East credit where oil and gas producers are benefiting from a surge in crude oil prices, Commerzbank’s Costa said earlier this month. Oil last traded at $79.55 a barrel, up 78 percent this year. Barclays managed Qatar’s sale with Credit Suisse, Qatar National Bank SAQ, Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to the prospectus. To contact the reporters on this story: Haris Anwar in Dubai at hanwar2@bloomberg.net Laura Cochrane in London at lcochrane3@bloomberg.net