GCC sovereign issuances dominated the fourth quarter of 2016 (4Q16), with gross issuance topping $23bn. Saudi Arabia accounted for most of the activity, while Bahrain and Kuwait borrowing accounted for the rest< NBK noted in its 'debt market ' update yesterday.
With the exception of Kuwait, all GCC sovereigns tapped international debt markets in 2016, in a bid to cope with tightening domestic liquidity, issuing $39bn worth of dollar denominated bonds. The year saw first time issuer Saudi Arabia come to market with its international debt offer of $17.5bn, as well as Qatar’s sizeable $9bn offering, while Abu Dhabi returned after a seven year hiatus, issuing $5 bn. Meanwhile, Oman borrowed $4.5bn throughout the year, and Bahrain $2.5bn. This is not to mention their large forays into the international syndicated loan market, where Saudi Arabia, Qatar, and Oman borrowed a combined $26.5bn.
The pick-up in international issuance helped ease liquidity constraints across the GCC. This helped moderate the climb in rates. The Saudi 3-month interbank rate dropped 35 bps from its peak of 2.38 percent, to settle at 2.03 percent.
