Middle East Bonds

Gulf bank sukuk is coming back on the radar for international investors for the first time since October, but not from regular sources. Oman’s Bank Muscat will begin speaking to regional banks next week about a debut, and Bahrain’s Gulf Finance House will ask shareholders to approve its first new deal since the financial crisis.

Oman’s Bank Muscat will meet with banks next week to discuss plans for its debut sukuk, after gaining shareholders’ approval to establish a Or500m ($1.3bn) sukuk programme, with the possibility of international issuances. Muscat also received shareholders' approval to expand its Euro Medium Term Note programme from $800m to $2bn, according to a senior official at the bank.

Gulf bank sukuk is coming back on the radar for international investors for the first time since October, but not from regular sources. Oman’s Bank Muscat will begin speaking to regional banks next week about a debut, and Bahrain’s Gulf Finance House will ask shareholders to approve its first new deal since the financial crisis.

The first mandate for a new Iraqi bond has been given since the start of the war in 2003. Gulf Keystone Petroleum has picked Deutsche Bank and Pareto Securities to arrange a RegS/144A three year transaction of up to $250m.

Dubai’s rollover of $20bn in debt with the UAE central bank and Abu Dhabi has banished the last spectres of the 2009 Dubai World crisis. But while its new found breathing room makes the emirate a very attractive proposition, what Dubai chooses to do with this should be the litmus test for foreign investors.

The Central Bank of Bahrain (CBB) will pay a 1% return on its latest BD20m ($53m) of short term sukuk al ijara — a tightening from last month’s issue which paid a 1.1% return.

Dubai bonds and sukuk traded up on Monday, after United Arab Emirates authorities revealed that its recently rolled over debt was refinanced on better than expected terms.

The bond market on Monday reacted calmly to a Crimean declaration of independence and its application to join Russia. Russia's bonds are still under pressure and CDS levels are still rising. But the primary CEEMEA market remains open, and Middle Eastern borrowers are among those planning deals, said EM debt bankers.

Dubai bonds and sukuk traded up on Monday, after United Arab Emirates authorities revealed that its recently rolled over debt was refinanced on better than expected terms.

Gulf Finance House will seek approval from its shareholders this month to issue $500m of convertible sukuk or other facilities.

More emerging market issuers could look to the Kangaroo market in the near future as they attempt to replicate the success of National Bank of Abu Dhabi’s second deal in the format. The trade, sold Wednesday, appealed to yield-hungry Australian investors.

Dubai’s recent rollover of $10bn in debt extended to it by the United Arab Emirates’ central bank was widely hailed at the time as a positive by market participants. But the lack of forthcoming detail since on the new terms and tenors of the arrangement has prompted concern for some investors.