Middle East

The Emirate of Sharjah launched a dollar bond on Wednesday, just over five months since it last tapped investors. But not all buyers were keen to add more exposure to the credit.

Arab Petroleum Investment Corp, the multilateral development bank headquartered in Saudi Arabia, returned to the capital markets to tap a bond it issued just last month. The dollar note saw a notable tightening in pricing.

The Emirate of Sharjah is sounding out investors for a dollar bond syndication, just months after its last issue. Some investors, however, said they were wary that the issuer was on the cusp of becoming a sub-investment grade credit.

Mamoura Diversified Global Holding, an Abu Dhabi sovereign investment vehicle, has mandated banks to sound out interest for a euro bond. The mandate follows a week of issuance in the currency from other CEEMEA borrowers.

Emerging market assets took a hit after several days of US rates volatility this week as market participants braced for further gyrations and issuers avoided raising dollar bonds. Market participants are praying that further central bank stimulus will pacify markets and believe that the asset class is far better prepared for higher rates than it was for the 2013 taper tantrum. Oliver West, Lewis McLellan and Mariam Meskin report.

Rating: A1/—/A

Saudi Arabia sold its second euro denominated bond on Wednesday, achieving a negative yield — the first bond of its kind from a Middle East issuer. However, some in the market were underwhelmed with the transaction, which they say is evident in the deal statistics.

Emerging market loan bankers say that despite a drought of activity, discussions with Middle East borrowers may offer a reprieve.

Saudi Arabia was set to sell its second ever bond in euros on Wednesday. The bond, which will allow the kingdom to further diversify its investor base, is expected to tighten considerably from initial price thoughts.

Saudi Arabia mandated banks on Tuesday to arrange a bond in euros, just a month after it last entered the market to raise dollars. The "opportunistic" bond will enable the kingdom to achieve tight pricing and diversification, market participants said.

HSBC has shifted responsibility for its regional businesses and given chief financial officer Ewen Stevenson a broader remit, ahead of updating investors with results on Tuesday and amid its overhaul of operations.

Expectations of increased demand for emerging market local currency bonds are starting to wane, as the macroeconomic backdrop and interest rate volatility point to a stronger dollar in the short term.