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MENA bond issuance totalled $48.1 billion during the first three months of 2026, down 12% from the same period in 2025, as escalating geopolitical tensions weighed on market activity, according to LSEG data. The number of issues fell 11% year on year.
Already seasonally subdued during Ramadan, which began in mid-February, GCC bond and sukuk issuance effectively ground to a halt in March as issuer caution intensified following the Iran–Israel war.
“Issuance dynamics were uneven over the quarter. January saw robust activity, while February was broadly in line with seasonal norms, despite coinciding partially with Ramadan. By contrast, March was materially weaker, with US dollar sukuk and bond issuances from the GCC countries broadly muted for most of the month,” said Bashar Al Natoor, global head of Islamic finance at Fitch Ratings.
Ordinarily, issuance volumes rebound after Ramadan, but that recovery failed to materialise this year, dragging down quarterly totals.
“While markets have historically rebounded relatively quickly once geopolitical tensions ease, the key challenge at present is the uncertainty surrounding the duration and trajectory of the conflict,” Al Natoor said.
“Until there is greater clarity on whether tensions stabilise, escalate or persist, visibility on the timing and strength of any recovery in issuance activity remains limited.”
Before activity stalled, Saudi Arabia was the most active issuer, accounting for 58% of total bond proceeds raised during the quarter. The two largest issuers by value were also from the kingdom.
In early January, Saudi Arabia raised $11.0 billion through a four tranche bond sale, while Saudi Aramco raised $3.95 billion.
The UAE accounted for 27% of all deals, with the Government of Abu Dhabi raising $2.99 billion.
Corporate issuers raised $32 billion during the quarter, while sovereigns and agencies raised $16 billion.
Financial institutions accounted for 44% of total proceeds raised in the first quarter of 2026, while governments and agencies accounted for 33%.
Sukuk
Islamic bond issuance in the region amounted to $14.6 billion during the quarter, down 17% year on year. Sukuk accounted for 30% of total bond proceeds, the lowest share in three years.
HSBC topped the MENA bond bookrunner rankings in the first quarter of 2026, with $4.08 billion in proceeds and a 9% market share. Standard Chartered ranked second with $4.05 billion, followed by Emirates NBD with $2.7 billion.
HSBC also led the sukuk bookrunner table, raising $1.27 billion, followed by Dubai Islamic Bank with $1.14 billion and Emirates NBD with $1.06 billion.
(Reporting by Brinda Darasha; editing by Seban Scaria)
