Regional debt issues to reach $20bn this year

05 September 2017

Saudi Arabia’s $9bn Islamic sukuk dominated the GCC region’s debt market between January and June 2017

Debt issuance in the region for the remainder of the year is set to remain high, according to a statement from Swiss-based bond strategies firm Fisch Asset Management.

The company has estimated new issues in excess of $20bn for the rest of the year with Bahrain and Saudi Arabia’s dollar sovereign deals expected to be completed by the end of the year.

In August, UK-based consultancy PWC said that the appetitie for debt issuance in the GCC has surged throughout the second quarter of 2017.

Saudi Arabia’s $9bn Islamic sukuk dominated the GCC region’s debt market between January and June 2017.

The Saudi sukuk, the first to be conducted in US dollar denomination, was structured into a $4.5bn five-year sukuk tranche at 100 basis points over the mid-swap rate and an equal-sized 10-year tranche at a spread of 140 basis points to the benchmark.

The Omani government also issued a $2bn, seven-year Islamic sukuk, which was structured at 235 basis points to the benchmark, during the second quarter of the year

Saudi Arabia’s Dar al-Arkan Sukuk Company issued a $500m sukuk, which received significant interest from international market participants. MEED understands the order book was close to SR4bn ($1.05bn), equal to two times of the amount issued.

The Dubai branch of Beijing-based Industrial & Commercial Bank of China (ICBC) led the region’s corporate bond issuance. The firm listed three bonds on Nasdaq Dubai amounting to $400m, $300m and $500m.

In Saudi Arabia, Acwa Power Management issued an $814m bond, while National Bank of Kuwait issued non-guaranteed bonds worth $750m as part of its medium term bonds issue programme.

 

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