UAE bucks regional trend with rising debt issuance in 1H 2025: Debt market activity in the UAE edged higher in the first half of the year, hitting USD 32.9 bn, up 3.8% y-o-y, even as most GCC countries saw double-digit declines, according to Kamco Invest’s GCC Fixed Income Market Update (pdf). The y-o-y growth was largely driven by corporate players, particularly banks.

This came amid a broader slowdown in issuances in the region: Total GCC issuances came in at USD 100.3 bn, down 22% y-o-y. This was mainly due to a decline in issuances from governments, which halved their issuances to USD 36.6 bn.

Bahrain was the only other bright spot: Bahraini issuers also defied the y-o-y downward regional trend. While Saudi Arabia retained its top spot in terms of fixed income issuance volume and value, it saw a 31% y-o-y drop in 1H to USD 50.2 bn from USD 72.4 bn a year earlier. Similarly, issuances from Qatar and Oman nearly halved on an annual basis.

Sukuk slump while bonds hold steady: Conventional bond sales held flat y-o-y at USD 60.9 bn in 1H, while sukuk issuances fell nearly a third to USD 39.4 bn. The drop came 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 (51.7%) to USD 8.7 bn in 1H 2025. Saudi issuers still led with USD 5.6 bn in green paper, only slightly below last year’s tally. Issuances in UAE stood at USD 3.1 bn in 1H, down from USD 5 during 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, with banks and financial firms holding 75% of all corporate maturities. Most of the maturities (59%) are in USD, followed by SAR and QAR. Saudi Arabia faces the biggest wall of maturities at USD 166 bn through 2029, while the UAE follows with USD 146.8 bn in maturities, primarily from corporates.

The outlook: 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.

This comes amid uncertainty over US tariffs and a weaker greenback, which are clouding the US Federal Reserve’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 seen cutting by just 25 bps.

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

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