The GCC debt capital markets in 2014 had an active second quarter, particularly in corporate bonds and sukuk, with large size deals that received a positive response from investors which was demonstrated by the tight yields achieved, according to PwC latest report.
UAE corporate bond issuances were dominant this quarter, where we saw sizable issuances from DP World Limited, issuing a $1 billion 10 year bond, and Etisalat issuing two $500 million bonds in five and ten year tranches and two $1.6 billion bonds in seven and twelve year tranches. Other noteworthy issuances include Commercial Bank of Qatar issuing a $750 million bond and the Bahrain based, Gulf International Bank B.S.C, issuing a $533 million bond. On the sovereign front, Central Bank of Kuwait issued a $ 35 million treasury bond and nine tranches of $177 million treasury bonds amounting to $1.6 billion.
Also in Q2 2014, the Qatar Central Bank issued three government bonds amounting to $261 million, $577 million and $261 million.
The sukuk market in the GCC saw corporate issuances from Saudi Electricity Global Sukuk Co.3 issuing a $1 billion and $1.5 billion sukuk maturing in 30 and 10 years, respectively.
Also the UAE based Emaar Malls Group, issued a $750 million sukuk maturing in 10 years. On the sovereign front, the Central Bank of Bahrain issued three tranches of a $53 million sukuk and three tranches of a $95 million sukuk.
“DCM in the GCC has grown and continues to grow as demand for debt remains strong. In Q2 2014, we saw sizable issuances, many of which were oversubscribed. The debt market in the region is expected to continue to flourish due to factors such as government spending, development of new projects and macroeconomic conditions, to name a few. However, there still remains an element of risk or uncertainty in the region as a result of the political unrest in the Middle East, which can contribute to the risk premiums seen on regional issuances,” Steve Drake, said.