Middle East Bonds

The world's largest oil company, Saudi Aramco, on Tuesday raised an $8bn multi-tranche bond, featuring a rare 50 year piece, in only its second entry into debt capital markets. Proceeds from the deal will help it to generate enough cash to fund a dividend of $75bn as oil prices remain under pressure.

A flurry of Gulf issuers was on track on Tuesday to securing last minute bond funding, as investor appetite appeared insatiable for emerging market debt amid a rally that may well be curtailed by the impending US Thanksgiving holiday.

Saudi Aramco, which made its debut in bond markets last year, has mandated banks to arrange a dollar offering, including a 50 year tranche — a maturity only issued once before by a Gulf borrower. According to market players, this is an opportunistic move to grab cash before year-end taking advantage of yield-hungry investors.

French agency Caisse des Dépôts et Consignations finished its 2020 syndicated funding programme with a visit to the Swiss market this week, printing an extremely tight deal through the high quality domestic covered bond curve.

Emerging market issuers have crept back into the small issuance window in international markets after a brief pause for the US elections, with Dubai Islamic Bank and Uzbekistan’s Ipoteka Bank issuing dollar-denominated bonds this week.

Sovereigns have dominated bond issuance in the CEEMEA region this year. But rating agencies expect sovereign downgrades in 2021.

Rating: Aa2/AA

Etihad Airways issued the first transition sukuk this week, a $600m deal, further burnishing its green credentials after issuing a loan linked to the UN’s Sustainable Development Goals less than a year ago.

Galaxy Pipeline Assets Bidco, a group of international investors that provided Abu Dhabi National Oil Company (Adnoc) with $8bn in a pipeline partnership deal earlier this year, has raised a $4bn triple tranche bond to refinance half of the loan that funded the team-up. The deal is, according to banks, the largest project bond ever raised.

The Emirate of Sharjah, which last entered markets this June with a Formosa bond, approached investors this week to raise $250m from a tap.

A sudden rush of deals from Middle East issuers hit the screens this week, giving the region its busiest week since early September.

Three borrowers in the Middle East are set to come to market for dollar benchmarks this week with a sudden rush of mandate announcements after a quiet few weeks in the region's debt capital markets.