Middle East Loans

The spread of Covid-19 in the Middle East and the simultaneous drop in oil prices has prompted governments across the region to increase borrowing from capital markets. But some credits will have a far easier ride than others, bankers and experts said.

Oman’s Bank Muscat, which is part-owned by the Sultanate of Oman, raised a $650m loan from international lenders. The loan was announced amid Moody's downgrading the bank and the Omani sovereign, the latest in a string of rating actions that have pushed the challenged Gulf nation into junk territory.

As the deadly Covid-19 virus continues to wreak havoc on global markets and supply chains, emerging market lenders are proceeding to discuss financing options with clients, but are only comfortable funding those of the highest quality, according to bankers. Origination processes are becoming more stringent than ever, with some lenders requesting to see borrowers detailed contingency plans.

Saudi Arabian fashion retailer Fawaz Abdulaziz Alhokair has raised an $800m multi-currency loan with a consortium of local lenders.

Omani gas transportation company, Oman Gas Co, a branch of state-owned Oman Oil Co, has sold an $800m credit facility to local lenders.

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Saudi Arabian food and beverage producer Almarai has secured a $100m loan from the European Bank for Reconstruction and Development (EBRD) to support expansion in Egypt and Jordan.

Nabil Lahham has joined HSBC to head up advisory and corporate finance coverage for the Middle East, North Africa and Turkey. He was most recently at Perella Weinberg Partners.

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Saudi Arabia's Saline Water Conversion Corp (SWCC) signed a $426.5m-equivalent loan with a consortium of local lenders. The deal comes after a disappointing year for international lenders, who were dismayed at the lower than expected volumes of Saudi Arabian activity.

Emirates Global Aluminium (EGA) has raised a $600m syndicated facility, which replaces a number of uncommitted bilateral loans.

Bahraini iron pellet producer Bahrain Steel is in discussions with lenders to refinance an existing facility, according to bankers. The deal, some say, is part of a broader trend among emerging market borrowers seeking to secure more attractive conditions.