x Abu Dhabi, UAEThursday 20 July 2017

Return of regional confidence encourages borrowers

UAE companies and governments are raising money from investors and banks in droves for the first time since revolutions rocked the Arab world earlier this year.

UAE borrowers are approaching investors and banks in growing numbers as confidence returns to debt markets for the first time after revolutions in the region during the Arab Spring.

Emirates Airline issued a US$1 billion (Dh3.67bn) bond this month and the Dubai Government recently announced a $5bn bond programme. Dolphin Energy, a gas pipeline company owned by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, is also said to be in talks with banks about refinancing debt through a $1bn bond.

In a potential further boost for confidence in regional debt markets, Reuters reported yesterday that the Dubai retail giant Majid al Futtaim Holding was considering raising up to $4bn from global investors. Abu Dhabi's Tourism Development and Investment Company is also reportedly planning to raise about $1bn.

"There has been a little uneasiness with respect to the global situation, which has probably played into the regional markets, but it's still a very attractive time to issue," Abdul Kadir Hussain, the chief executive of Mashreq Capital, said of Dubai's bond.

The market for bank loans in the Middle East is also heating up. Regional companies are looking to borrow $5.5bn from banks, according to a Bloomberg News report yesterday.

If those deals are completed, total loans in the second quarter would reach $11.5bn, the report said, topping the first quarter's $8bn figure.