Saudi bond issuances rise 29% to $26 bln in H1 2019: report

Saudi entities issued bonds worth $25.6 billion in the first half of 2019 through eight deals, registering an increase of 29 percent in volume year-over-year, Debtwire Par said in a recent report.

The second quarter dominated, representing 70 percent of bond volumes for the period, a result of notable deals such as $3.1 billion and $7.5 billion of bonds issued from the government of Saudi Arabia, it added.

The Kingdom also completely dominated the bond market and claimed top issuance in the MENAT region. The country grabbed 20 percent market share of the Central & Eastern Europe, Middle East and Africa (CEEMEA) market.

Volumes soared by 101 percent from $12.7 billion in H1 2018 to $25.1 billion in H1 2019. While the CEEMEA bond market fell by 5.8 percent, the MENAT region captured 6.7 percent more of the market, the report noted.

However, the Kingdom’s loan market significantly dropped in the first half 2019 compared same period last year with volume totaling $9.8 billion from 13 deals. Despite having twice, the number of deals compared with H1 2018, volumes decreased by 53 percent year-on-year due to overall slow issuance in the region and that the surrounding regions have claimed more market share.

Saudi Arabian loan refinancing activity in the first half of 2019 totaled $3.7 billion, registering a fall of 80 percent year-on-year, Debtwire Par said.

“Some of the issuance has been moved to more real estate projects, where government economic reform plans to increase funding by 2030 are already being felt,” it noted.

Despite low margins in the Middle East region offered by major lending players, the exclusive low lending arrangements with the government have slowed medium-sized banks and are beginning to curtail funding from European bankers.

“Saudi Arabia is the fourth largest loan issuer in the MENAT region for H1 2019 and fifth in the entire Central & Eastern Europe, Middle East and Africa (CEEMEA) market,” said Diana Apedu, market analyst at Debtwire Par.