Bond sales from the six-nation Gulf Cooperation Council will remain “strong” as companies in these countries seek a substitute for declining lending from European banks, the regional head of Deutsche Bank AG, said.
The pipeline for bond sales in the GCC is “very, very strong and I think will remain” that way, Ashok Aram, chief executive officer for the Middle East and North Africa for the bank, said at a news conference in Dubai today. The GCC region has “relied a lot on bank loans but bank loans are going to be more constrained” as European lenders reduce debt and seek to raise capital to comply with more stringent rules, he said.
Governments and companies in the GCC, seeking to benefit from the lowest interest rates in 20 years, have raised $28.2 billion from 58 bond issues so far this year, compared with the $13.6 billion raised from 26 issues in the same period of 2011, according to data compiled by Bloomberg. Syndicated loans have raised $24.3 billion for borrowers so far this year, compared with $26.1 billion in the same period of 2011, the data shows.
Frankfurt-based Deutsche Bank is the third-biggest arranger of bond sales in the GCC this year after HSBC Holdings Plc and Standard Chartered Plc, according to the data. Deutsche Bank has helped clients raise $2.23 billion from seven issues this year, and is one of the banks currently arranging the sale of Islamic bonds, or sukuk, for Qatar Islamic Bank SAQ.