x Abu Dhabi, UAESunday 23 July 2017

Bonds and loans keep up the flow

The region's bond and loan markets have remained an active source of fees for banks during the past two years, though buyers are becoming harder to find.

The region's bond and loan markets have remained an active source of fees for banks during the past two years, though buyers are becoming harder to find as concerns grow of a bubble in emerging market credit with inflation and interest rates expected to rise within the next 12 months.

Sukuk deals by the Dubai Government, Emirates Airline and Dubai Electricity and Water Authority have attracted high take-up levels, but that has brought heightened concerns about how long demand could last as spreads tighten and structures become riskier.

"You're right at the top of this market at the moment," said an international bank executive. "People who have to do bonds should do bonds now, because I don't know how the next six to 12 months will be."

Nonetheless, debt capital markets deals, including bond and sukuk sales, are up 19 per cent to US$8.8bn (Dh32.32bn) this year, according to data from Thomson Reuters.

Meanwhile, a $1.28bn financing package secured by Etihad Rail was one of the biggest loan deals worldwide this year.

 

ghunter@thenational.ae