Middle East

The European Bank for Reconstruction and Development plans to raise its new investment to more than €10bn in 2019 for the first time in the bank’s history, after suffering a fall last year as it took a hit to its profits. By Phil Thornton.

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It was all going so well, until it wasn’t. After a strong run for Turkish borrowers in the capital markets, news of tumbling central bank reserves sparked an investor exodus and hasty action aimed at supposed short sellers in the foreign exchange market this week. While some emerging markets old hands expect things to blow over after the country’s local elections on Sunday, any surprises there could become catalysts for a deeper crisis.

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State oil company Saudi Aramco is expected to tap the bond market in the next fortnight for a deal that could be anywhere in the region of $7bn-$15bn, according to bankers in the region away from the deal. Estimates of the premium Aramco will have to pay over the Kingdom of Saudi Arabia curve is being discussed as negative to plus 15bp, depending on the size of the deal.

Aramco’s eagerly awaited $69.1bn deal to buy petrochemical firm Sabic landed this week, prompting speculation over the financing’s structure and timing. Loans bankers are expecting to cover a large portion of the deal and expect it will be well supported, writes Mariam Meskin.

The Government of Sharjah printed a $1bn seven year sukuk on Tuesday. The strength of demand surprised even Tom Koczwara, director of the emirate’s debt management office.

Confidence in Turkey is flagging this week as the currency is fluctuating and Turkish president Recep Tayyip Erdogan has imposed limitations on Turkish banks lending lira.

Akbank has closed an oversubscribed loan, welcoming eight new banks to its syndicate and kickstarting the refinancing season for Turkish banks. The deal was signed amid increasing market uncertainty in Turkey, with the lira having weakened and uncertainty surrounding local elections this weekend.

Turkey has had a sensational quarter, with borrowers from the country raising more than $10.2bn in the market — the highest total in history. But with its central bank short of reserves and its currency struggling to hold on to its gains, a cap in hand visit to the IMF may be around the corner, and Turkish issuers’ best funding days may be behind them.

The Government of Sharjah has launched its $1bn seven year sukuk with books for the deal in excess of $4.3bn. A banker on the deal put the new issue premium paid at 0bp-5bp and said that 'this was the result we were aiming for', given that this is the first deal from the Emirate printed with eligibility for the JP Morgan emerging market bond indices.

Bankers remain confident that Turkey's 'resilient' banking system will weather increasing political and economic volatility, as the country enters a recession and approaches local elections.