Qatar has issued the highest value of sovereign bond at $12.0bn in the second quarter of 2018, according to a report by PwC Middle East.
The report said Qatar issued a bond, which consisted of three tranches: a $3.0bn five-year tranche, a $3.0bn 10-year tranche, and a $6.0bn 30-year tranche.
In addition, the government of Saudi Arabia issued a triple-tranche bond total valued $10.9bn.
Led by Qatar and Saudi Arabia, the GCC sovereign bond market witnessed proceeds of $22.9bn in Q2 2018 from its two largest sovereign bond issuers, PwC said.
The $12.0bn sovereign bond issued by Qatar represents the largest placement by an emerging market sovereign so far this year. On the corporate front, debt activity has been relatively slow.
However, with the recent recovery in oil prices and improvement in government fiscal deficits, sovereign debt issuances are expected to taper in the latter half of 2018, according to PwC.
PwC Middle East Capital Markets Leader Steve Drake said, “GCC debt markets continued to be dominated by sovereign issuances, with sizeable issuances from the state of Qatar and Kingdom of Saudi Arabia this quarter. However, given the recovery in oil prices and easing of government fiscal deficits, we would expect sovereign issuances to taper in the latter half of 2018.
“European debt markets have been sluggish, with overall volumes and issuances remaining flat in this quarter. The looming global trade wars, a stronger dollar and oil prices, and concerns over liquidity in the secondary market have affected investor sentiment. We have seen a number of deals being pulled this quarter as corporates await the right window of opportunity.”
Steve Drak
