Middle East Bonds

Bahrain’s decision to revive last week's cancelled bond sale was driven by reverse enquiry from investors who were unperturbed by the issuer’s new junk status, according to bankers on the deal.

HSBC Group’s Middle East business took a $300m hit in 2015, mainly due to higher loan impairment costs as the bank expects an increase in loan defaults in the UAE, according to its annual report.

The Islamic Development Bank is embarking on a three day sukuk roadshow, starting on Sunday.

The Kingdom of Bahrain has returned to tap bonds less than a week after an unexpected Standard & Poor’s downgrade led to the issuer cancelling a $750m dual tranche bond increase. Rival bankers said the strategy was right, but were surprised by the tight pricing offered.

Bahrain’s decision to pull its $750m tap on Thursday was hailed by some as a prudent move to protect investors, but aggressive secondary market action following the downgrade has still left some smarting, writes Virginia Furness.

Bahrain joined Poland this week in the dubious honour of being downgraded by Standard & Poor’s after the pricing of a new bond but before settlement.

Bahrain took the decision to pull its $750m tap on Thursday morning after a shock move by Standard & Poor’s to downgrade the sovereign to junk. Bankers on the deal have criticised S&P for its “clumsy” timing.

Bahrain increased the size of its bond tap on Tuesday from $500m to $750m. While bankers away from the trade said while it came cheap for a tap, it was not surprising given the challenges the country faces.

Bahrain reopened its 2021s and 2026s with close to a 50bp concession on Tuesday — evidence of the fact that wider spreads in the Gulf bond market are here to stay.

Middle East banks are dreaming up new funding schemes this year, turning to private placements and the Asian markets as the cost of borrowing in dollars soars on the back of market volatility.

Oman Telecoms (Omantel) is withdrawing a $130m dual currency sukuk it issued on January 27, two sources have told GlobalCapital.

Saudi Arabia will likely issue its long anticipated debut dollar bond in dual sukuk and conventional format, according to bankers in the region.