Middle East Bonds

NMC Health, the scandal-hit UAE hospitals operator, has been delisted from the London Stock Exchange, after it was placed into administration by the UK High Court earlier this month following an application by creditors led by Abu Dhabi Commercial Bank. Equity capital markets sources reflect on the shocking saga.

Saudi Aramco, the world’s largest oil company, is hunting for a $10bn loan, according to market sources. Plummeting oil prices will send borrowers across the Gulf scrambling to raise financing. But creditors seem happy to plough money into the region, for now. Mariam Meskin reports.

Saudi Arabia followed neighbours Abu Dhabi and Qatar to the international bond markets on Wednesday, achieving a $7bn deal that was nearly eight times subscribed.

The State of Qatar and the Emirate of Abu Dhabi looked to sell bonds this week in the wake of extreme oil price volatility that has left commodity exporters with fragile fiscal positions.

The top tier of emerging markets sovereigns are cramming into this week’s issuance window, as Abu Dhabi followed Qatar’s Tuesday blowout with a triple tranche bond deal of its own.

The State of Qatar on Tuesday issued a $10bn three tranche bond, with a final demand book in excess of $44bn. The deal came in the wake of extreme oil price volatility, though Qatar has buffers to protect it against any major economic shocks.

A pair of sovereigns hit the MTN market to raise debt this week, looking for cash to meet increased borrowing requirements as they grapple with the coronavirus pandemic. Israel came to the MTN market this week printing paper to helpfund its Covid-19 response, while Ireland ventured out to the ultra-long end of the curve to print its fourth century bond.

Emerging markets bondholders started the week in another round of pain as the price of oil fell to a 17-year low, dragging down risk sentiment and putting fiscal balances into more doubt.

NMC Health’s $360m convertible bonds are trading at mere cents on the dollar, suggesting virtually no recovery value after the scandal-hit UAE hospitals group said on Tuesday it had discovered even more undisclosed debt.

Kuwait's Equate Petrochemical stuck its head above the parapet this week, holding investor calls for a triple-tranche bond issue.

The spread of Covid-19 in the Middle East and the simultaneous drop in oil prices has prompted governments across the region to increase borrowing from capital markets. But some credits will have a far easier ride than others, bankers and experts said.

NMC Health, the scandal-hit UAE-based hospitals operator, has $2.7bn in undisclosed debt, taking its total gross debt to around $5bn, and an investigation into its finances has found evidence of serious fraud.