GCC Bonds and Sukuk Issuances Jump by 55%, Led By Saudi Arabia

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The Kingdom secured €2.25 billion through euro-denominated bond sale in February.

It is a good day for Saudi Arabia as primary debt issuances of bonds and sukuk in the Gulf Cooperation Council (GCC) increased by 55.1% in 2024 to $147.9 billion.

Sukuk are financial instruments issued by governments to raise money from investors for a period.

Kuwait Financial Centre, also known as Markaz, reported that Saudi Arabia led the GCC region, raising $79.5 billion across 79 offerings, an increase of 51.4% from 2023. Kingdom contributed to 53.7% of the primary debt issues in the GCC.

In recent years, Saudi Arabia’s debt market has grown, attracting investor interest in debt instruments due to increasing interest rates.

In February, the Kingdom secured €2.25 billion ($2.36 billion) through euro-denominated bond sale, including its first green tranche, as part of its Global Medium Term Note Issuance Program.

The Kingdom’s National Debt Management Centre completed its riyal-denominated sukuk issuance for SR3.07 billion ($818 million).

The country raised sukuk worth SR3.72 billion in January, SR11.59 billion in December, and SR3.41 billion in November.

The total value of the primary issuances in the GCC in the fourth quarter of 2024 was $21.2 billion, a 33% increase to 2023.

The report stated that the United Arab Emirates (UAE) was silver in primary bond and sukuk in 2024, raising $38.5 billion through 109 issues, a 28.1% increase from 2023.

Markaz noted that the UAE accounted for 26% of the total primary debt issues in the GCC region.

Entities from Qatar were the third largest issuers, generating $15.8 billion through 74 offerings, 10.7% of the issuers.  

Bahrain raised $6.9 billion from 10 issuances in 2024, a 29.1% growth from the previous year. Kuwaiti entities raised $3.9 billion in 2024 through 9 issuances, having an annual growth of 358.6%. Oman had the lowest issuance with $3.4 billion through 15 offers, only 2.3% of the market.

GCC corporate primary issuances increased by 45.5% in 2024, reaching $79.7 billion. Corporate offerings covered 53.9% in 2024, maintaining the trend from 2023 when they made 57.5%. Government-related corporate entities made $17.4 billion last year, 21.7% of all corporate issuances.

The study reported that the total sovereign primary issuances in the GCC increased by 68.2% in 2024, reaching $68.2 billion.

Sovereign issuances were 46.1% of the total market in the GCC during 2024.

Kamco Invest published a report highlighting the growth in the debt market and that Saudi Arabia will have the largest share of bond and sukuk maturities in the GCC, reaching $168 billion from 2025 to 2029. It mentioned that the Kingdom’s maturities would be due to government bonds and sukuk issuances, which will reach $110.2 billion.

Conventional issuances in the GCC increased by 79.4% in 2024, reaching $78.9 billion.

Markaz indicated that sukuk offerings increased by 34.4% in 2024, raising $69 billion. It stated that 2024 saw the highest appetite for conventional bond issuances in the GCC, 53% of the total issuances, up from 46.1% in 2023.

The analysis revealed that government issuances were the significant player in the 2024 market, raising $68.2 billion through 46 issuances, representing 46.1% of the total.

The financial sector raised $51.3 billion through 203 offerings, 24.7% of the total market. The energy sector secured $20.3 billion through 28 issuances, whereas other sectors made 5.51% only.

Issuances with less than five years of maturity made 36.5% of the GCC debt capital markets in 2024, $54 billion through 215 issuances. Issuances with maturities ranging from five to ten years raised $51.3 billion across 43 offerings, 34.7 % of the overall market. The primary issuances worth $1 billion or more raised the largest: $69.3 billion in 2024 from 43 offerings.

Issuances between $500 million and $1 billion raised $50.5 billion through 59 transactions. The highest number of issuances was under the $100 million category, with 129 issuances raising $7.2 billion in 2024.

In 2024, the US dollar-denominated sukuk issuances dominated the GCC bonds and sukuk primary market, raising $99.7 billion through 190 issuances.

The second largest currency issued was Saudi riyal, raising $33.9 billion through 21 issuances.

Fitch Ratings reported that the GCC debt market reached an outstanding $1 trillion by the close of November.

In February, another Fitch report predicted that Saudi Arabia will play a vital role in boosting US dollar debt and Sukuk issuance in 2025 and 2026 since the Kingdom’s banks and corporations tap into international debt markets to diversify their funding sources, with banks expected to issue over $30 billion in dollar-denominated debt this year.

Fitch report added that Saudi Arabian banks have expanded their international DCM activities since 2020, aligning with their growth strategies and foreign currency needs. Companies are also diversifying their funding sources beyond conventional bank loans.

The agency released a report projecting that the Kingdom’s debt market will reach $500 billion by the 2025 end due to economic diversification efforts under Vision 2030.