Middle East Bonds

The first round of oil price driven rating actions hit the Middle East this week, with Standard & Poor’s taking its knife to Bahrain and Oman and putting Saudi Arabia on negative outlook. The countries’ respective sukuk seemed safe from secondary volatility, although Bahraini paper — now on the cusp of junk — is likely to feel some pressure, said investors.

RAM Ratings has assigned ratings to Abu Dhabi Islamic Bank’s (ADIB) planned senior and subordinated sukuk.

International sukuk issuer Qatar International Islamic Bank (QIIB) has asked shareholders for permission to sell up to Qr3bn ($823m) equivalent in tier one sukuk.

UK Export Finance (UKEF) is in the documentation stages of its first guarantee for a sukuk deal, said the agency’s head of aerospace Gordon Welsh, and plans to test the Islamic bond market with an innovative structure and longer maturities.

National Bank of Abu Dhabi printed its $750m five year bond on Wednesday from a book of $1.8bn, having been successful in attracting emerging market and investment grade accounts despite tight pricing flat to the curve.

First Gulf Bank, the third largest bank by assets in the UAE, is meeting investors in Europe next week regarding a possible Eurobond.

National Bank of Abu Dhabi printed its $750m five year bond on Wednesday from a book of $1.8bn, having been successful in attracting emerging market and investment grade accounts despite tight pricing flat to the curve.

National Bank of Abu Dhabi has released initial price thoughts for a five year dollar benchmark at 90bp over mid-swaps, equating to only around a 10bp pick-up from the secondary trading of its August 2019s.

National Bank of Abu Dhabi (NBAD) is meeting investors this week to offer an update on its recently announced financial results. A senior dollar bond may follow.

African sovereign sukuk issuance could grow in the next two years, Bank of London and the Middle East (BLME) believes. But other analysts predict only one or two Africa sovereigns will follow South Africa into the international sukuk market.

Egypt is preparing to follow Tunisia’s landmark return to the international bond market as investors shrug off conflict in Syria and the oil price’s collapse to regain appetite for Middle Eastern credits. Underscored by this week’s $1bn deal, confidence in the region has rebounded to levels last seen before the Arab Spring in 2011, writes Virginia Furness.

Republic of Tunisia made its standalone return to the capital markets on Tuesday with its first non-agency guaranteed bond since the Arab Spring.