GCC capital markets to see bond issuances swell in 2016
The GCC is set to experience record borrowing volumes this year as new players look to tap the international debt capital markets in a bid to fund capex initiatives and refinance existing debt.
“The low price of oil means GCC sovereigns, banks and companies are all in the process of reassessing their funding sources,” said Jonathan Brandon, Managing Editor of Bonds & Loans. “In the past, only a handful of players considered bond and sukuk markets for funding. But today, everyone is looking for alternatives, especially at a time when capital structures are increasingly becoming stretched. That is surely going to push the development of the market.”
Hard currency bond sales by Middle Eastern and North African companies will reach a record high in 2016, rising by US$4bn year-on-year to US$39bn, according to data from JP Morgan, despite the fact global debt issuances in other emerging markets look set to fall overall – from US$251bn in 2015 to US$238bn.
The low price of oil and subsequent drop in regional liquidity is prompting borrowers in the GCC region to look to Eurobonds and hard currency denominated sukuk to fulfil their funding needs.
“The drop in oil price and uncertainty around future US Fed rate rises has increased pressure on bankers, issuers and investors to successfully close transactions to fuel the Middle East economy, leading to a higher rate of issuance in the region,” said Alex Johnson, CEO of Global Financial Conferences. “With a heightened need to secure funding and increasing competition to access these issuances, companies are going to need build strong business connections in this financially precarious time.”
World leading economist Simon Johnson (MIT Sloan School of Management & Peterson Institute for International Economics) will help shed light on the impact of future US interest rate rises and low oil prices on the GCC region’s capital markets at the Bonds, Loans &Sukuk Middle East conference in Dubai in April this year.
Johnson will be joined by globally renowned emerging market investors Brigitte Posch(Babson Capital), Salman Ahmed(Lombard Odier Asset Management) and Hans Humes(Greylock Capital Management), who will share some insight into why the region’s debt stands out among other emerging markets as a significant investment opportunity.
Contact Natashah Wilson for more information about Bonds, Loans & Sukuk Middle East 2016 at Natashah.Wilson@GFCConferences.com