Saudi Arabia maintained its position as the region’s largest fixed income issuer during the first half of the year, raising some USD 50.2 bn in new bond and sukuk sales, according to Kamco Invest’s GCC Fixed Income Market Update (pdf). The Kingdom accounted for half of all GCC issuances during the period, despite a 31% y-o-y drop.

It’s a broader Gulf slowdown, but corporates are holding up: Total GCC issuances came in at USD 100.3 bn, down 22% y-o-y. The drag came almost entirely from governments, which halved their issuances to USD 36.6 bn.

UAE + Bahrain were the only bright spots: Emirati and Bahraini issuers were the only ones to buck the y-o-y downward regional trend. Total UAE issuances rose 3.8% y-o-y to 32.9 bn, driven by corporate issuers. Meanwhile, issuances from Qatar and Oman nearly halved on an annual basis.

Sukuk slumped, while bonds held steady: Conventional bond sales remained flat y-o-y at USD 60.9 bn in 1H 2025, while sukuk issuances fell nearly a third to USD 39.4 bn, amid rising market caution and a shift toward simpler debt structures. Perpetual bond issuance rebounded sharply, hitting USD 10.7 bn — already matching full-year 2024 levels, with Saudi and UAE issuers leading the way.

Green issuances are slowing: GCC green bond and sukuk volumes fell by more than half to USD 8.7 bn in the first half of the year. Saudi issuers still led with USD 5.6 bn in green paper, only slightly below last year’s tally. Issuances in the UAE stood at USD 3.1 bn, down from USD 5 bn in the same period last year.

GCC fixed income maturities piling up: GCC bond and sukuk maturities are set to remain elevated through 2029. Sovereigns face USD 226.1 bn in maturities over the next five years, while corporates must refinance USD 223 bn. Most of the region’s maturing debt is USD-denominated (59.3%), with banks and financial firms holding 75% of all corporate maturities.

Leading maturity schedules: Saudi Arabia faces the biggest wall of maturities at USD 166 bn through 2029, driven largely by sovereign paper. The UAE comes in second place with USD 146.8 bn.

The Fed situation: Uncertainty over US tariffs and a weaker greenback are clouding the Fed’s rate path, with one to two cuts now expected by year-end. Most GCC central banks are likely to follow suit due to USD pegs, though Kuwait — pegged to a currency basket — is expected to cut its rates by just 25 basis points.

LOOKING AHEAD- Debt issuance in the region is expected to pick up in 2H 2025, as issuers move to lock in lower rates. Kamco forecasts USD 21.7 bn in maturities through year-end, with government deficits and Kuwait’s planned USD 6 bn bond sale set to drive activity. Sukuk issuance is also seen rising on stronger demand and funding diversification.

Zooming out: The global debt market posted a record-smashing USD 6.4 tn in issuances during 1H, up from previous years. Companies, sovereigns, and financial institutions rushed to tap markets in a still-favorable rate environment, according to LSEG data.

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