Gulf monarchies have discreetly raised almost $10bn in private sales of bonds this month in their first international borrowing since the Iran war delivered a major hit to their economies.
Abu Dhabi has sold $4.5bn, Qatar $3bn and Kuwait $2bn in private placements of US dollar bonds since the start of April, sidestepping public markets where they typically issued debt before the war but where borrowing costs can be more uncertain.
The sales highlight how Gulf states have been using a tentative ceasefire between the US and Iran as an opportunity to quickly raise money, as they tot up the costs of lost oil and gas revenues because of the near-complete closure of the Strait of Hormuz and damage from Iranian strikes.
Abu Dhabi, the capital of the United Arab Emirates, is raising “a little bit of extra cash just in case,” one banker familiar with its debt sales said.
The governments of Abu Dhabi, Qatar and Kuwait did not respond to requests for comment.
The Gulf states are among the richest in the world, with their sovereign funds and state investors collectively controlling well over $3.5tn in assets. But they have nevertheless become regular borrowers in debt markets, to help fund vast investment plans as they seek to diversify their economies away from oil and gas.
The Iran war is delivering a sizeable blow to their economies, with Qatar forced to suspend exports of liquefied natural gas and oil flows from Kuwait and the United Arab Emirates sharply reduced, hitting the bedrock of their economies.
“Even if the war ends soon, we expect all six Gulf states to record negative GDP growth this year of 5-10 per cent,” Capital Economics analysts said.
Although this month’s flurry of deals in the Gulf is unusually large, private placements — direct sales of bonds to small groups of investors — in sovereign debt are generally on the rise, even though they offer issuers a less diverse investor base and the bonds tend to be less liquid.
Big global asset managers such as Pimco are increasingly willing to buy bonds where they negotiate terms and pricing bilaterally, while governments receive more certainty on borrowing costs by working with smaller groups of investors.
“Pimco has been a longstanding investor and financing partner across the Gulf region,” said Pramol Dhawan, head of Pimco’s emerging markets portfolio management team.
“We view the region as a core part of our emerging markets and private credit franchise, and we remain ready to deploy further capital to support Gulf sovereigns as their financing needs evolve,” he added. He declined to say whether Pimco has participated in the recent flurry of deals in the region.
Abu Dhabi sold $2bn in debt with a coupon of 4.6 per cent in a deal organised by Goldman Sachs on Monday. Goldman declined to comment.
The emirate also raised $2.5bn last week through private placements of existing bonds, in deals arranged by Standard Chartered.
HSBC helped Kuwait to sell $2bn in notes this week that had a coupon of 4.8 per cent, as did JPMorgan’s placement for Qatar. Qatar’s bonds were listed on the London market this week, a typical part of making private placements easier to trade and value.
Abu Dhabi’s deals have increased its international bond borrowing so far this year to $8bn, compared with just over $3bn in 2025, when the emirate sold bonds at some of the lowest premiums over US Treasuries ever recorded for emerging market dollar debt.
The emirate issued $3.5bn in dollar debt in January and February, with the last sales just days before the US and Israel began strikes on Iran.
In a sign of investor nervousness over the hit to these economies, the war pushed up the cost of five-year default protection on Abu Dhabi’s debt to as high as about 0.55 percentage points last month, compared with 0.3 percentage points or below before the conflict, but it has fallen to about 0.4 percentage points since the ceasefire.
Abu Dhabi issued an update to documentation for its bonds this month that warned it “has not yet completed an assessment of the immediate or long-term damage to its economy or infrastructure” from the war.
Just before the conflict, JPMorgan had flagged that debts of the UAE and its members would be upgraded to developed market status in bond indices maintained by the bank. Qatar and Kuwait were upgraded last year.
Kuwait’s private debt sale, which bankers said was to boost a rainy-day buffer, is particularly notable as the country only returned to global bond markets last year, with about $11bn of issuance, after an eight-year absence.
Saudi Arabia, the Gulf’s biggest sovereign borrower, is yet to tap private markets in any disclosed postwar deals. The kingdom already sold $13.5bn in bonds in January and February prior to the start of the war, compared with $53bn for the whole of last year.
Gulf state-owned banks have meanwhile raised hundreds of millions of dollars in recent weeks through private placements of bonds and other forms of short-term debt, sometimes through branches in Asia.
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