Wall Street Banks Pulls Back From Middle East SPACs on SEC Clampdown - Bloomberg

Wall Street Banks Pulls Back From Middle East SPACs on SEC Clampdown - Bloomberg

Wall Street banks are rethinking their involvement in the listings of special purpose acquisition companies in the Middle East’s nascent market as new liability guidelines from US regulators chill the once red-hot industry.

Middle East SPAC sponsors such as Gulf Capital and Investcorp were initially in talks with Citigroup Inc. and Bank of America Corp. respectively, but they are likely to rely on local banks to finalize the deal, according to people familiar with the matter. It’s unclear what role either US bank will play, if any.

Citigroup will be very cautious in accepting new SPAC mandates in the region although it won’t pull back completely and could step up work depending on how the final rules in the US look, the people added, who asked not to be identified discussing private matters. Bank of America has also paused work on SPACs more broadly while the US rules are being finalized.

Goldman Sachs Group Inc., which has pulled out of working with most SPACs it took public, is currently not chasing blank-check firms in the Middle East, people familiar with the matter said. JPMorgan Chase & Co. is being similarly cautious.