Middle East Bonds

The Kingdom of Bahrain is considering a tap of its dual tranche note issued last November in a bid to save its investment grade rating, according to investors in the region.

Middle Eastern banks are casting their funding nets wider in order to counter spiralling costs of funding and dwindling local demand, say bankers in the region.

National Bank of Abu Dhabi has mandated six banks for investor meetings starting February 8.

Reports that Saudi Arabia has offered to cut oil production by up to 5% if Russia matched the cut resulted in a jump in oil prices to $35 a barrel on Thursday. Despite positive momentum in the markets, bankers say Middle Eastern issuers need a more sustained period of stability before venturing to market.

Oman Telecoms (Omantel) sold a $130m-equivalent sukuk via auction in the domestic market on Wednesday. Though the issuer could have achieved tighter pricing in the loan market, it wanted to aid the development of the sukuk market in Oman, said bankers.

With bond issuers dithering this week in the emerging markets, a loan for Qatar snatched attention as the loan market bubbled away.The sovereign has completed and signed a $5.5bn five year loan, most of it held by the top line of banks on the deal.

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.