Middle East Bonds

Emerging market bond investors are confident the stellar start to the year can continue, particularly after the US Federal Reserve did little to dampen their spirits at its latest monetary policy meeting this week

CEE sovereign's success to drive borrowers to issue in US currency over euros

Issuer started around 40bp wider than a fellow Israeli bank, said an off-deal banker

GCC issuance has been limited to FAB and Saudi Arabia but is expected to pick up

$2bn debut will likely be Israel's only benchmark of 2023 but taps or private deals possible

Scarce Israeli issuance means that when issuers from the country do come to market, investors pile in

Bond adds to already strong CEEMEA supply

Scarce issuance from Israel means investors have big demand when deals appear

Bankers and investors saw the concession as low as zero but as high as 20bp

Lender’s book was nearly three times oversubscribed, despite opening in London

US inflation reading later this week will be the first major test for the EM primary market this year

Context and market conditions are always important when considering the merits of any new issue, but this was particularly the case in 2022, given how volatile markets were. Every CEEMEA issuer had to pay a high all-in price to get their deal away, and new issue premiums varied between issuers. EM issuers faced the toughest conditions in many years during 2022. The Russian invasion pushed investors to flee from riskier assets. The war had practical effects too: disruption to energy and food supplies sent inflation soaring and the resulting interest rate rises meant borrowing costs jumped sharply for CEEMEA issuers. New issue volumes dropped from 2021, particularly among CEEMEA corporates. By George Collard and Oliver West.