Middle East

Struggling Gulf state Bahrain has fallen further into junk territory, with its budget deficit expected to balloon as a result of an oil price slump and the Covid-19 pandemic. But it is not all gloom, experts said, as bond markets remain wide open for high yield issuance.

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.

Monday’s resignation of Lebanon’s government in the wake of last week’s blast in Beirut has intensified angst among market spectators over the country’s future. IMF assistance hinges on the new government being reformers, and investors are being urged to be patient through what is expected to be a rocky restructuring process.

A tumultuous week in Turkish currency markets ended with the lira hitting new lows against the dollar and the Central Bank of the Republic of Turkey finally taking action to try and calm volatility. Amid such swings, a sovereign bond issue looks unlikely.

Akbank, one of Turkey’s largest financial institutions, has raised a green bond, the first of its kind from the country since the Covid-19 pandemic began.

Turkey continued to teeter on the brink of a currency crisis this week, as the lira went on another rollercoaster ride and touched a record low.

Delek Drilling, the Israeli energy company, launched a $2.25bn bond sale on Tuesday, in one of the few high yield emerging market bond deals seen during the coronavirus pandemic.

Israeli energy company, Delek Drilling, is set to launch a $2.25bn bond sale this week to support the expansion of its gas fields in the Mediterranean Sea, according to market sources.

GLP and First Abu Dhabi Bank both tapped investors in the renminbi bond market on Thursday. The Singapore-based logistics facilities provider took Rmb200m ($28.6m) from a Panda while the Middle Eastern firm headed to the Formosa market.

Falls in the Turkish lira have reignited concerns about a currency crisis this week, with the Central Bank of the Republic of Turkey’s (CBRT) unorthodox exchange rate policy raising questions from investors about the robustness of the country’s respected banking sector. Mariam Meskin and Ross Lancaster report.

Despite the success of many emerging market sovereigns in issuing bonds in international markets this year, Turkey, typically a leading issuer, has been notable by its absence. And with its foreign exchange reserves running lower, the risks of it not being able to come to market at all could be mounting.

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.