GCC entities raise $118.65bn via bonds and sukuks
23 May 2016 - 1:41
by Satish Kanady
DOHA: The aggregate primary issuance of bonds and sukuk by GCC entities, including Central Banks, totaled $118.65bn in 2015, a 37.20 percent increase from the total amount raised in 2014. A large part of the increase is attributable to the Saudi Arabian sovereign issuances, first of such issuances since 2007.
Central Bank Local Issuances (CBLI) are Fixed Income securities issued by GCC central banks in local currencies and with short maturities of less than one year for the purpose of regulating levels of domestic liquidity. During 2015, a total of $53.498bn was raised by the GCC central banks, namely by the Central Bank of Kuwait, Bahrain, Qatar, and Oman.
The Central Bank of Kuwait raised the highest amount with $23.347bn, representing 43.64 percent of the total amount raised by CBLIs through 65 issuances, followed by the Qatar Central Bank (QCB), which raised a total of $15.11bn, a reduction of 21.43 percent from $19.243bn raised in 2014.
The GCC Bonds and Sukuk market is composed of bonds and sukuk issued by GCC Sovereign and corporate entities for financing purposes and denominated in local and foreign currencies. A total of $65.155bn was raised in the GCC bonds market in 2015, a growth of 82.40 percent from $35.720bn raised in 2014.
The Kuwait Financial Centre (Markaz) noted in its report yesterday that a total of $44.377bn was raised in H2 2015, 113.58 percent higher than $20.778bn raised in H1 2015, driven by new Saudi sovereign issuances which amounted to $30.647bn.
Saudi Arabia was the leading issuer in 2015, raising $35.008bn through 15 issues and representing 53.73 percent of the total value raised by the GCC issuers during the year. In terms of the frequency of issuances, UAE maintained its position as the dominant issuer with 149 issuances during 2015. Qatari entities raised $2.041bn.
The total value raised by corporate entities decreased by 17.51 percent from $32.970bn in 2014 to 27.196bn in 2015. During 2015, sovereign issuances dominated the majority of the amount raised in the GCC bonds market, with 37.959bn or 58.3 percent of the total amount raised through 16 issues. Saudi Arabia raised SAR115bn ($30.647bn). Kingdom of Bahrain issued a 10 year $1.10bn bond priced at 7.00 percent and a 5 year $1.150bn bearing a coupon of 5.875 percent.
Conventional issuances raised $55.593bn, or 85.32 percent of the total amount raised in GCC bonds and sukuk market during 2015. This was an increase of 109.79 percent as compared to 2014. Sukuk issuances witnessed a modest growth of 3.71 percent from $9.22bn in 2014 to $9.562bn in 2015.
Government sector accounted for the largest amount raised during the year, with $37.959bn representing 58.26 percent of the total amount raised, through 16 issuances. The Financial sector followed with $22.874bn (35.11 percent) raised through 179 issues.
GCC bonds and sukuk issuances during 2015 had issue sizes ranging from USD4.0 million to USD5.33 billion. Issuances with principle amounts greater than or equal to USD1.0 billion raised the largest amount of USD40.189 billion, representing 61.68% of the total value.
During 2015, 86 bonds and sukuk, representing total of $26.49bn, were listed on exchanges. The number of regional bonds and sukuk listed on international exchanges were 74 issues with a total value of $19.37bn versus 12 issuances listed on regional exchanges with a total value of $7.11bn.
As of 31 December 2015, the total amount outstanding of corporate and sovereign bonds issued by GCC entities was $274.988bn. Corporate issuances make up the majority of the total amount outstanding with $201.90bn, or 73.42 percent of the total amount. Sukuk issuances represented 30.69 percent of the total amount with $84.391bn. The Peninsula