Middle East Loans

Despite the disruption that the coronavirus pandemic and, more recently, volatility in global markets have brought to emerging market debt, issuers in the CEEMEA region are not backing away from their pivot towards ESG financing. Though concerns about greenwashing are holding the market back, new sustainability-linked and transition structures are tempting issuers.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, has signed a $15bn multi-currency revolving credit facility with a syndicate of 17 international banks. Loan market conditions, participants said, are still attractive for borrowers, despite a drought of deals over the last year.

Syndicated lending volumes, particularly across emerging markets, have tumbled since the onset of the coronavirus pandemic last year. Though some had hopes that 2021 would yield more activity for lending desks, that optimism has been postponed to next year, as lenders say they simply cannot compete with other asset classes for business.

Saudi Arabia has secured an export financing agreement with Korea’s export credit agency and trade insurance corporation. The deal, which will bolster trade between the two, is the kingdom’s second ECA-backed deal.

Energean, the London-listed oil and gas company, has signed a $700m loan to develop a gas field off the shore of Israel, as the company enters the final stretch in having the field up and running.

Qatar National Bank, by assets the largest bank in the Middle East and North Africa, has raised a dual tranche $3.5bn syndicated loan, one of the largest emerging market loans signed this year.

Two Middle Eastern borrowers are tapping the Asian loan market as part of a new syndication strategy, taking advantage of the slow primary supply in Asia.

Sharjah Electricity & Water Authority (SEWA), a state-owned firm in the United Arab Emirates, is making a rare appearance in the Asian syndicated loan market with a $250m borrowing.

State-owned Kuwait Petroleum Company has raised a syndicated loan from local lenders worth $3.27bn equivalent. The deal is one of the few major financings to take place in the Middle East during the coronavirus pandemic, and comes at a time when Kuwait faces critical economic challenges.

A small group of Japanese banks have signed a syndicated facility that will support the funding of a solar power plant in Qatar, which is jointly owned by a consortium of Japanese, French and Qatari firms.

Saudi Arabia has secured its inaugural green loan backed by an export credit agency (ECA). The deal, which is the first of its kind in the region, may have a domino effect on other sovereigns in the Gulf, said bankers.

Oman, one of only two junk-rated sovereigns in the Gulf region, is tapping lenders for up to $2bn, as some say it could not find the right conditions in the bond market. According to bankers familiar with the deal, credit risk considerations are foremost and the sovereign will have to pay up to borrow.