Abu Dhabi, Qatar, and Kuwait Issue $7 Billion in Bonds Privately Amid Middle East Conflict

Gate News message, April 18 — Abu Dhabi, Qatar, and Kuwait have issued $7 billion in bonds through private placements since the US-Israeli war on Iran began on February 28, selling directly to select investors while public bond markets remain closed to new issuance. The conflict escalated into a broader Middle East war before a tentative military ceasefire began on April 8.

Abu Dhabi sold $2 billion of seven-year bonds via private placement and an additional $2.5 billion of three and eight-year bonds through a “tap” offering, which expands the size of previously issued debt. Qatar issued $3 billion and Kuwait issued $2 billion, both through private placements with seven-year duration, according to Mashreq Capital data. Regional corporate and sovereign bond prices fell sharply during the conflict but have recovered following the ceasefire, though they remain slightly below pre-war levels.

Bond trading volumes across the Middle East have remained low since the war began. Mohieddine Kronfol, chief investment officer for global sukuk and Middle East fixed income at Franklin Templeton in Dubai, stated that “if the ceasefire holds and we start returning to normal, there should be a big pick-up in issuance on public markets.” He added that markets have been “measured and resilient” and have not priced in significant downside risk, indicating little additional risk premium is likely for new bond issuances.

Amol Shitole, head of fixed income at Mashreq Capital, noted that “bond markets were effectively closed for six weeks” during March and early April, a global phenomenon not limited to the Middle East region.