Middle Eastern borrowers are flooding the primary market with a trio of dollar bond deals on Wednesday, marking one of the busiest days for regional credit and Islamic debt this year as they look to take advantage of better market conditions.
Saudi Arabia’s sovereign wealth fund known as the PIF is looking to sell $1.25 billion of seven-year dollar-denominated Islamic debt, at around 110 basis points over Treasuries, 35 basis points tighter than initially indicated, according to people familiar with the matter, who asked not to be identified. Book orders were in excess of $8.2 billion, the people said.
Banque Saudi Fransi priced $650m of Additional Tier 1 notes. United Arab Emirates-based port operator DP World Ltd. is offering a $1.5 billion 10-year sukuk that drew investor bids of more than $3.6 billion, other people said.
The flurry of Middle East sales comes after Abu Dhabi’s leading oil producer sold its first-ever Islamic bond and amid a fresh wave of broader global activity, helped by calmer markets and improved financing costs. US stocks on the S&P 500 had climbed for six straight sessions through Tuesday’s close, while benchmark Treasury yields are back down to some of the lowest levels since early April.
“Markets were volatile in the first two weeks of April. Spreads widened as US tariff policy uncertainty weighed on sentiment,” said Basel Al-Waqayan, Bloomberg Intelligence’s fixed-income strategist for the Middle East and Africa. “Now primary markets are more constructive on the back of US Treasury rates rallying back — so issuers can price competitively.”
The surge in issuance also underscores a broader rebound in Gulf credit markets after a sluggish start to the year.
Sovereign markets were active on Wednesday, with Bahrain preparing a two-part dollar sale including a 12-year conventional bond and eight-year sukuk, according to people familiar with the matter. Combined books were in excess of $6.3 billion.
Sukuk issuance has historically attracted stronger demand relative to conventional bonds, particularly as global ESG mandates and regional liquidity deepen. This week’s activity signals that issuers are moving fast to capitalize on constructive conditions — and that investor appetite for Shariah-compliant structures remains deep.
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