Middle East bond market on for record-breaking year after Saudi $17.5bn deal
The middle eastern bond market boom has captured the attention of investors around the world, according to one of the leading players behind Saudi Arabia’s record-breaking $17.5bn debt sale.
Jean-Marc Mercier, global co-head of debt capital markets at HSBC who met over 300 potential investors as part of the Saudi deal, told City PM the market is maturing and investors are hungry to fund the region’s diversification drive.
The comments come as new figures from Thomson Reuters show middle eastern governments have already raised more than two-and-a-half times as much from bond sales as this time last year.
“For issuers, it’s the right time to come to the market. There is a huge window now before the US election,” Mercier said.
For Saudi Arabia, along with the likes of Bahrain, Oman and Qatar who have flocked to the international money markets this year, others suggested the deals are about more than raising money.
One market source told City PM: “They have reserves of about $600bn so there is no rush, and Aramco will be privatising so they don’t really need to go out and raise capital. I think it was to establish their name, to get out there.”
HSBC’s Mercier also believes the deal could help kick start the transformation of international finance in the region, adding: “I’m sure they’ll come back, quite possibly in 2017.”