Middle East Bonds
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Last weekend’s attack on Saudi oil facilities drove up the oil price and caused a rush to safe haven assets, but investors say they expect the turbulence to be short-lived. -
Four Middle Eastern borrowers are set to come to market next week, as issuers and investors alike shake off the volatility caused by the attack on Saudi oil facilities last weekend.
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Gulf borrowers are being increasingly lured by the attractive terms offered in bond and sukuk markets, much to the detriment of international lenders, many of which are disgruntled by the disappointing loan volumes in the region.
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Emaar Properties showed there is a strong appetite for sukuk paper with its trade this week, joined in the market by Bank of Sharjah, which was able to raise $600m, setting the stage for a third Middle East issuer to tap the market next week.
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Multilateral development bank Arab Petroleum Investments Corp (Apicorp) is eyeing up the bond market for a potential benchmark issue, while a green euro bond may also be on the cards for the Saudi-headquartered bank, according to Sherif Ayoub, chief financial officer.
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Kuwait's Warba Bank is embarking on a roadshow to market its first senior unsecured sukuk. The dollar five year note is expected to be printed “around the 3% mark”, according to a DCM banker on the deal.
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Holders of the defaulted EA Partners bonds claim that Etihad Airways and Abu Dhabi gave them implicit guarantees for the notes, which were issued to fund other troubled airlines. The bondholders, backed by restructuring advisers and corporate sleuths, are buckling up for a battle for their money. Karoliina Liimatainen reports.
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Two CEEMEA issuers — one of which is a Russian corporate — have mandated for bonds and are heading off on roadshows, ending a barren summer for the asset class.
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Investors this week have again affirmed their confidence that Middle Eastern issuance will be the redeeming factor in emerging markets this year with a handful of names expected to raise debt, despite a challenging third quarter.
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The Middle East is facing its heaviest ever redemption schedule at the start of 2020, and investors are expecting the region to dominate the primary market when issuance begins in September.
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