Middle East Bonds

Two Middle Eastern issuers were on track to price sukuk on Wednesday, but Saudi Arabia’s jumbo $11bn bond has cast a shadow over Sharjah Islamic Bank’s trade and led to decreased demand from outside of the region, according to a Dubai-based banker on that deal.

The Kingdom of Saudi Arabia printed its $11bn bond on Tuesday, which several bankers and investors thought had been timed to maximise disruption of Qatar’s return to market, which is also expected this week. But leads said the modest size taken by Saudi from a $50bn book showed that there was no intention of throwing the capital markets into disarray.

Saudi and Qatar look to be printing jumbo bonds this week, but the timing of both in the same few days after so many months of waiting is prompting chatter about which sovereign has caused the traffic jam and whether political machinations are behind it.

Mannai Corp, a Qatari conglomerate, looks set to bring the first public bond from the country since the Gulf diplomatic crisis erupted last summer.

Two Middle East issuers are roadshowing deals, adding to the flurry of post-Easter CEEMEA new issue announcements.

Mannai Corporation looks set to bring the first public bond from Qatar since the Gulf diplomatic crisis erupted last summer.

The Kingdom of Bahrain was set to print a $1bn 7.5 year sukuk on Wednesday evening from a book of $2.2bn, with leads having managed to crunch the coupon to 6.875%. Rivals had called the guidance for the note “a new record” high for a new issue premium, but leads said the illiquidity of the sukuk curve rendered the concept of new issue premium almost meaningless.

The Kingdom of Bahrain has squashed its plans to issue conventional bonds but is forging ahead with its long seven year sukuk, putting out initial price guidance for the deal.

Syndicates away from the Kingdom of Bahrain's new issue are saying that a huge widening in the sovereign’s outstanding bonds is indicative that investors are “not happy” to see the new paper arriving, though those on the deal are simply blaming market volatility.

Bahrain is on track to return to the dollar bond market this week despite weak external conditions, according to bankers involved in the process.

After wrapping up investor meetings on Monday, Abu Dhabi Commercial Bank has opened books on a new five year dollar deal, offering around 30bp premium in order to attract investors in a "shakier market.”

The Kingdom of Bahrain has announced the only new CEEMEA bond mandate of the week so far, looking for a multi-tranche benchmark deal to follow its storming last foray into the international bond markets in September.