Saudi Arabia Dominates GCC Bond and Sukuk Issuances in 2024
In 2024, the Gulf Cooperation Council (GCC) witnessed a significant surge in bond and sukuk issuances, with Saudi Arabia emerging as the predominant player. According to a report by Kuwait Financial Centre “Markaz,” the total value of primary debt issuances in the GCC reached $147.9 billion, marking a substantial 55.1% increase from the previous year.
Geographical Breakdown
Saudi Arabia led the region by raising $79.5 billion through 79 issuances, accounting for 53.7% of the total GCC debt issuances in 2024. This represents a 51.2% increase from the $52.5 billion raised in 2023. The United Arab Emirates (UAE) followed, with issuances totaling $38.5 billion across 109 issues, comprising 26.0% of the market and reflecting a 28.1% growth from the previous year. Qatar secured the third position, issuing $15.8 billion through 74 issuances, representing 10.7% of the total GCC debt market.
Sovereign vs. Corporate Issuances
The report highlighted a notable increase in both sovereign and corporate issuances:
- Sovereign Issuances: GCC sovereign entities raised $68.2 billion in 2024, a 68.2% increase from the previous year, accounting for 46.1% of the total issuances.
- Corporate Issuances: Corporate entities issued $79.7 billion, marking a 45.5% rise from 2023 and representing 53.9% of the total debt issuances. Notably, government-related corporate entities contributed $17.4 billion, equating to 21.7% of all corporate issuances.
Conventional Bonds vs. Sukuk
The GCC debt market exhibited a growing preference for conventional bonds over sukuk (Islamic bonds):
- Conventional Bonds: Issuances surged by 79.4% in 2024 compared to 2023, totaling $78.9 billion and comprising 53.3% of the total issuances.
- Sukuk: Issuances increased by 34.4%, amounting to $69.0 billion and representing 46.7% of the total debt market.
Sector Analysis
The government sector dominated the debt market, raising $68.2 billion through 46 issuances, which accounts for 46.1% of the total value. The financial sector followed, with $51.3 billion raised through 203 issuances, representing 34.7% of the total. The energy sector also played a significant role, contributing $20.3 billion through 28 issuances.
Maturity Profiles
The maturity distribution of the issuances was as follows:
- Less than 5 Years: $54.0 billion (36.5%) through 215 issuances.
- 5–10 Years: $51.3 billion (34.7%) through 43 issuances.
- 10–30 Years: $32.8 billion (22.2%) through 20 issuances.
- Greater than 30 Years: One issuance valued at $2.0 billion.
- Perpetual Issuances: $7.8 billion through 17 issuances, up from $4.2 billion through 11 issuances in 2023.
Issue Size and Currency Denomination
Issuance sizes varied significantly, ranging from $4.0 million to $12.6 billion. Notably, issuances of $1 billion or more totaled $69.3 billion through 43 issuances, representing 46.9% of the total amount issued. In terms of currency, US Dollar-denominated issuances led the market, raising $99.7 billion through 190 issuances, which constitutes 66.9% of the total value. Saudi Riyal-denominated issuances followed, totaling $33.9 billion through 21 issuances, accounting for 23.0% of the market.
Credit Ratings
Approximately 62.4% of GCC conventional bonds and sukuk were rated by at least one major rating agency (Standard & Poor’s, Moody’s, Fitch, or Capital Intelligence) in 2024, a decrease from 69.1% in 2023. Of these rated issuances, 55.5% were classified as Investment Grade, while 6.8% fell into the Sub-Investment Grade category.
Saudi Arabia’s Strategic Debt Issuances
Saudi Arabia’s dominance in the GCC debt market is further underscored by significant issuances from key state entities:
- Public Investment Fund (PIF): In September 2024, the PIF secured $2 billion from its fourth debt issuance of the year, comprising $1.5 billion through three-year sukuk and $500 million through green notes maturing in October 2032. The demand for these issuances was robust, with the sukuk and green notes attracting orders exceeding $7.4 billion and $3.4 billion, respectively
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