Middle East Bonds

The Emirate of Sharjah printed a five year sukuk in horrific market conditions on Wednesday, but bankers say the pragmatic emirate should be applauded as conditions are only going to get worse.

Iran’s re-engagement with the global financial system after the lifting of US and EU nuclear related sanctions at the weekend opens up a wealth of opportunity for trade finance. But the reticence of international banks, which are unable or unwilling to navigate the wide-reaching sanctions that remain in place, leaves a lasting barrier to market growth.

A 30bp sell-off of Middle Eastern credit overnight could not knock Sharjah off course as it printed a five year sukuk in what bankers described as horrific market conditions on Wednesday.

Iran’s re-engagement with the global financial system after the lifting of US and EU nuclear-related sanctions at the weekend will have profound consequences, but this is no “eureka” moment for its relationship with international banks.

Sharjah opened books on Tuesday for the first international bond from the Middle East this year. Pricing for the five year note started back of the borrower’s outstanding 2024s.

Israel has embarked on a US roadshow for a dollar bond, using the same three lead managers as it has done for its last two Eurobonds.

Standard Chartered has firmed up the management structure of its global capital markets team led by Henrik Raber, as the bank divvies up responsibilities based on regions and products.

Gary Dugan has returned to Emirates NBD as chief investment officer, based in the United Arab Emirates.

Oman Telecommunications has mandated three banks to arrange investor meetings for a Reg S only dollar and/or Omani rial sukuk.

For a region often embroiled in political unrest, the Middle East’s bond market has historically been one of the most emerging economies. But 2015 was the year the drop in oil prices truly inflamed fears about the impact for capital markets issuance — the bond market will be there for Middle East borrowers in 2016, they just might not like the pricing Steve Gilmore reports.

Sharjah has become the first CEEMEA issuer to brave the bond markets this year, mandating six banks for a Reg S-only dollar sukuk roadshow and defying sceptics who said earlier this week that Middle East issuance would be postponed as geopolitical tensions in the region escalated.

Low oil prices and the absence of its biggest lender will see the global sukuk market shrink further in 2016 though a couple of brand new issuers are expected, according to Standard & Poor’s.