Fixed income maturities in the GCC are expected to remain elevated over the next five years as a result of issuances made during the pandemic years to support economic growth globally. Kamco Invest’s GCC Fixed Income Market Update for July highlighted that GCC bonds and sukuk issuances surpassed expectations with record levels during the first half of the year, reaching $113.7 billion. The primary market saw significant growth, with Saudi Arabia accounting for nearly 50% of the year-on-year growth in issuances during H1-2024, followed by UAE and Qatar.
Data from Bloomberg reveals that GCC sovereign maturities stand at $174.3 billion over the next five years (2024-2028), slightly higher than corporate maturities at $165.5 billion. These maturities are expected to remain elevated until 2029 before declining steeply from 2030 onwards. The majority of these maturities are denominated in US dollars, with high investment grade or A-rated instruments dominating around 40.9% of overall maturities in the coming years.
The UAE is expected to have the highest fixed income maturities between 2024-2028 at $116.3 billion, followed by Saudi Arabia at $105.3 billion. Maturities in Qatar and Oman are projected at $61.3 billion and $22.4 billion, respectively. In terms of sector maturities, banks and other financial services have $128.6 billion in maturities over the next five years, representing 77.7% of total corporate maturities and 37.8% of total maturities in the GCC until 2028.
Banks are leading in terms of issuances and maturities in the coming years, with UAE banks having the highest maturities of $53.4 billion and Qatari banks at $20.4 billion. Real estate maturities are concentrated in the UAE and Saudi Arabia. Kamco expects a record year for GCC issuances, with corporate issuances likely to tap the market towards the end of the year. Sovereign issuances are expected to decrease compared to H1-2024 levels, with maturities of $24.8 billion expected in the second half of the year.
Green bonds are gaining interest among GCC issuers, with Qatar issuing a green bond this year. HSBC, one of the arrangers, noted that other GCC countries may follow suit. Oman has prepared a sustainable finance framework for borrowing. Overall, the GCC fixed income market is expected to see continued growth in maturities and issuances over the next five years, supported by economic recovery and government stimulus efforts.
