Middle East

Sukuk supply looks set to step up in the first half of February, after two Gulf borrowers this week announced plans for roadshows ahead of potential dollar deals in the format.

Akbank made a bullish return to the international syndicated loan market this week, going beyond its usual one year tenor refinancing, despite the recent difficulties Turkish borrowers have faced in obtaining longer dated loans. But the deal confirms that pricing levels have changed markedly in the past six months, said bankers.

Sukuk supply looks set to step up next week after Dubai Islamic Bank became the second borrower in two days to announce plans to meet investors ahead of a potential dollar deal in the format.

Akbank has made a bullish return to the international syndicated loan market, going beyond its usual one year tenor refinancing, despite the difficulties Turkish borrowers have had recently in obtaining longer dated loans. But the deal confirms that pricing levels have changed markedly in the past six months, said bankers.

Even with much of Asia inactive due to the Chinese New Year holiday, emerging market bonds seemed a more nervous market this week with only one issuer braving a deal.

Equate Petrochemical Company will meet investors next week ahead of a potential sukuk market debut.

Turkey found itself firmly in junk territory on Friday after it lost its last investment grade rating from Fitch, but the issuer’s CDS has tightened in response and as Turkey’s blowout trade on January 18 attests, it always has the capability to fund.

Rating downgrades on Friday for Turkey sovereign debt have not dented the appetite of the country’s banks to borrow, with two firms said to be joining Akbank in pursuing loans.

Bank of Sharjah on Monday named four banks for a new senior dollar offering after Standard & Poor’s slapped the Emirate with a two notch downgrade on Friday.

Rating: N/A

Akbank plans to launch the first of its semi-annual one year refinancings early next week in the loan market’s first chance this year to gauge appetite for Turkish risk, but there is already a clear indication already that longer tenors will be challenging.

Dubai’s sovereign wealth fund defied doubters on Wednesday with the successful launch of a $1bn 10 year sukuk at tight pricing levels.