16 November 2016
Bond and Sukuk sales continued to be popular in the GCC market during the third quarter of 2016 since crude prices remain low resulting in revenue shortfalls and the need for debt coverage. Shouldoil prices not increase significantly, there is likely to be a similar funding need for Q4 2016 as well.
The sovereign bonds market continued to be active following a similar trend of large sovereign bond issuances last quarter. Bahrain issued BHD 300million development bonds (approximately $790m) with a 3 year maturity. More bonds are expected early next quarter from the Sultanate of Oman.
In the corporate bond market, Burgan Senior SPC Ltd issued its $500m 5 year bond carrying interest of 3.125 percent. Furthermore MAF Global Securities Limited issued $300m Notes due 2024 carrying interest of 4.75 percent. Both issuances were guaranteed by Burgan Bank K.P.S.C, incorporated in State of Kuwait, and Al Futtaim Group, incorporated in the Emirate of Dubai, respectively.
Emaar Sukuk Limited successfully issued a $750m 10 year Sukuk, guaranteed by Emaar Properties P J S C Furthermore, Qatar Islamic Bank issued a QR 2bn 3 year Sukuk(approximately $550m) in order to enhance its capital adequacy ratios and support business growth. In the Kingdom of Saudi Arabia, Bank Albilad issued SR2bn 10 year Sukuk (approximately $533m) with the bank having the right to call the Sukuk at the end of the fifth year.
On the sovereign front, the Central Bank of Bahrain was an active contributor in the region issuing SukukAl- Salam worth in total BHD 177.85m (approximately $469m) and Sukuk Al- Ijara worth in total BHD 104m (approximately $274m). Sukuk Al- Salam carry a maturity of 91 days compared to 182 days of Sukuk Al – Ijara.
Steve Drake, Head of PwC Middle East’s Capital Markets and Accounting Advisory Services team in the Middle East region said: “Bond and Sukukmarkets continued to be active in Q3, however the value of transactions was lowercompared to somenotable issuances in Q2 from regional governments. Markets are expected to continue to be active in the last quarter of the year,howeverincreased demand for funding due to depressed oil prices might impact pricing.”
Bond and Sukuk sales continued to be popular in the GCC market during the third quarter of 2016 since crude prices remain low resulting in revenue shortfalls and the need for debt coverage. Shouldoil prices not increase significantly, there is likely to be a similar funding need for Q4 2016 as well.
The sovereign bonds market continued to be active following a similar trend of large sovereign bond issuances last quarter. Bahrain issued BHD 300million development bonds (approximately $790m) with a 3 year maturity. More bonds are expected early next quarter from the Sultanate of Oman.
In the corporate bond market, Burgan Senior SPC Ltd issued its $500m 5 year bond carrying interest of 3.125 percent. Furthermore MAF Global Securities Limited issued $300m Notes due 2024 carrying interest of 4.75 percent. Both issuances were guaranteed by Burgan Bank K.P.S.C, incorporated in State of Kuwait, and Al Futtaim Group, incorporated in the Emirate of Dubai, respectively.
Emaar Sukuk Limited successfully issued a $750m 10 year Sukuk, guaranteed by Emaar Properties P J S C Furthermore, Qatar Islamic Bank issued a QR 2bn 3 year Sukuk(approximately $550m) in order to enhance its capital adequacy ratios and support business growth. In the Kingdom of Saudi Arabia, Bank Albilad issued SR2bn 10 year Sukuk (approximately $533m) with the bank having the right to call the Sukuk at the end of the fifth year.
On the sovereign front, the Central Bank of Bahrain was an active contributor in the region issuing SukukAl- Salam worth in total BHD 177.85m (approximately $469m) and Sukuk Al- Ijara worth in total BHD 104m (approximately $274m). Sukuk Al- Salam carry a maturity of 91 days compared to 182 days of Sukuk Al – Ijara.
Steve Drake, Head of PwC Middle East’s Capital Markets and Accounting Advisory Services team in the Middle East region said: “Bond and Sukukmarkets continued to be active in Q3, however the value of transactions was lowercompared to somenotable issuances in Q2 from regional governments. Markets are expected to continue to be active in the last quarter of the year,howeverincreased demand for funding due to depressed oil prices might impact pricing.”
© The Peninsula 2016
