Private debt sales lure Mena borrowers as bond yields rise

Private debt sales lure Mena borrowers as bond yields rise:

Selling bonds in the public market is proving to be too much drama for some companies in the Middle East and North Africa. They’re opting for private placements instead, which can be done in smaller tranches, are quicker to execute and keep companies from having to bare their finances for all to see. They’re also less expensive. Borrowers in the Mena region have raised $3.1bn this way so far in 2018, almost matching last year’s total of $3.8bn, according to data provider Dealogic.

“The new issue market is quite volatile right now and doing a public transaction is a significant logistical exercise – appointing bookrunners, going on a roadshow, plus issuance windows have been fleeting,” said Andy Cairns, the head of global corporate finance at First Abu Dhabi Bank, the UAE’s biggest bank.

Private placements “allow an issuer to reduce execution risk because you are responding to a specific investor request and you will only proceed with the fundraising once all deal terms have been agreed,” he said.