Gulf bond markets have flourished in recent years, but they remain dominated by sovereign or sovereign-linked debt. Lower-rated entities have proved either reluctant or unable to convince investors to buy their paper.
However, the hunt for higher yields by global investors, along with the ongoing dearth of regional bank lending and the funding needs of private companies, means that the local debt markets may start to broaden into the high-yield space next year.
High-yield bonds are tranches of debt issued by companies that are rated below investment grade – so-called “junk” – and typically carry a coupon, or interest rate, at least 350 basis points above comparable US Treasury bonds and bills.
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