Middle East Bonds

Israel became the first emerging market sovereign to put down a marker in the bond market this year with the announcement of a European roadshow next week.

Middle Eastern issuance is set to begin for the year with Gulf International Bank, which is looking to refinance a $500m bond due in December. The issuer is expected to be the first of many hoping to lock in funding before the next US rate hike pushes up borrowing costs.

Emerging market bankers are optimistic for a busy first quarter after markets opened on Tuesday in a much stronger position than they had a year ago. Sovereign issuers from the Middle East and CEE are expected to lead the charge.

Strong credit fundaments and a supportive technical bid from local investors should help the GCC’s borrowers to weather any volatility thrown at them in 2017. But analysts warn of political threats putting negative pressure on the region’s bond prices. Virginia Furness reports.

CEEMEA borrowers had their busiest year since 2013 this year, issuing $157bn of international bonds which is just shy of double 2015’s volumes.

Equate Petrochemical Company, the Kuwaiti energy firm that made its global bond market debut in October, is on track to become only the second borrower from the jurisdiction to issue in sukuk format.

Etihad Airways has issued the first ever Schuldschein for a Middle Eastern company, increasing the deal from €150m to €209m in syndication with strong demand from European and Asian commercial banks.

Saudi Arabia's International Company for Water and Power Projects (ACWA Power) has pushed back its bond plans to 2017 after investors asked for more time to “understand the structure fully”. The target coupon, which investors told GlobalCapital was too low, will also be readdressed, according to a lead banker.

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EM bankers and investors were on Thursday underwhelmed by the Organisation of the Petroleum Exporting Countries' (OPEC) agreement to cut oil production for the first time in nearly eight years. But they said it was a positive that the price of Brent crude oil had seemingly found a floor.

The Islamic Development Bank (IsDB) printed the first public dollar trade from the EMEA region since the November 8 US elections on Wednesday and managed to drive pricing inside its curve.

The Islamic Development Bank is marketing a sukuk, the second Islamic bond in two weeks. The deal is expected to be priced on Wednesday.