Mena syndicated loans outpaced bond issuance in 2018

Muscat: The Mena syndicated loan issuance in 2018 outpaced bonds at US$133 billion compared to US$89.5 billion, according to research released by Debtwire, a provider of high value news, data and analysis on global debt markets.
The largest bond issued in 2018 was by the Government of Qatar, at US$12billion, and the largest syndicated loan was a US$16 billion refinancing by the Government of Saudi Arabia, according to data from Debtwire.
“Loan volumes were boosted by opportunistic refinancing activity, and several mega deals such as Saudi Arabia’s US$16 billion club loan and its sovereign wealth fund, the Public Investment Fund’s US$11 billion syndicated facility," Elias Lambrianos, CEEMEA Deputy Editor at Debtwire, said.
"The withdrawal of bond plans by several issuers during the fourth quarter also paved the way for loans to surpass bonds in 2018. In 2019, the perennially active Mena region could be the great hope for debt capital market bankers, although most remain cautious,” he added.
The Gulf Cooperation Council (GCC) dominated Mena loans and bonds volume in 2018 with 81 per cent and 91 per cent, respectively. However, North Africa loan volume more than doubled from 2017, squeezing out market share from GCC and ‘Others’ (comprising Iraq and Iran). This was the result of an increase by 10 deals in Egyptian loan activity, adding US$16 billion to the region and 91.5 per cent to North African activity. Despite bond market volumes decreasing in the region by 28 per cent year on year, North Africa’s market share was relatively stable from 2017, at 8 per cent.
Across the region, the most prolific borrower type for bonds was sovereigns, contributing US$55 billion, or 61.5 per cent. This represented a 33.2 per cent decrease on a year-on-year basis. Corporates accounted for a quarter of loan market issuance at US$33.6 billion, or 25.3 per cent, representing a 32 per cent increase compared to 2017. Saudi Arabian sovereign issuance occupied a substantial portion of total loan and bond market activity, contributing 30.8 per cent and 37 per cent respectively.