UAE borrowers tap int’l debt markets at a record clip

UAE sovereigns and corporates are tapping international debt markets at a record pace, selling USD 30.3 bn worth of USD- and EUR-denominated bonds through 28 July, according to Bloomberg. Sales are up one-third y-o-y so far this year.

For reference, that’s up USD 3.7 bn from the record set during the same period six years ago.

Investor confidence remains resilient despite heightened geopolitical volatility since late February, with recent issuances heavily oversubscribed and cleared at tighter spreads than initial guidance.

Among the issuances were a USD 500 mn AT1 issuance from Mashreq, a USD 600 mn bond from Rakbank, USD 500 mn five-year sukuk at 7.125% from Burjeel Holdings, and Ajman Bank tapped banks for a USD-denominated AT1 capital sukuk.

ICYMI- The UAE’s recent reclassification to developed-market status in JPMorgan’s emerging market bond index triggered a temporary, four-month phased selloff, expanding UAE sovereign spreads to around 77 bps over US Treasuries.

Portfolio managers view this wider spread as compelling value for AA-rated credit risks, especially given the country’s broader economic momentum, Arqaam Capital’s Fady Gendy told the newswire.

There was also some private placement action too, with Abu Dhabi raising USD 2.5 bn from private issuances a few months ago, in what experts told us was a move to bypass the price volatility of public markets. Lenders like our friends at Mashreq, FAB, and ENDB had also raised funds through private placements.

What’s next: With borrowing costs remaining broadly unchanged from pre-war levels, local issuers will likely continue frontloading liquidity needs into 2H 2026 to fund post-turmoil expansion and secure long-term capital while global demand remains locked in.

Summer lull incoming? Analysts previously told us that the usual summer slowdown in July and August could put the brakes on the recent debt markets restart, but much will depend on market conditions.