Gulf issuers likely to tap US investors

Gulf bond issuers are likely to tap US investors for a more diverse funding base, as demand for high-rating emerging market debt rises, bankers in Dubai said yesterday.

There has been an increase in Gulf corporate and quasi-sovereign issuers opting for 144a types of issues, which are regulated under the US securities commission allowing US investors to buy into the issue.

"As a trend we saw more 144a issuance in the US in 2009, and the issuance was hugely successful," said Andrew Dell, managing director for Global Financing at HSBC, speaking at the launch of the Gulf Bond and Sukuk Association (GBSA) in Dubai. "These issues firmly established the region in the mind of the US onshore investor."

Debt issuance in the Gulf reached about $15 billion (Dh55bn) in the last quarter of 2009 alone, a mix of sovereign, quasi-sovereign, and corporate issues, having picked up substantially in the third quarter.

Earlier this week, two regional issuers indicated their intention to issue 144a bonds, with roadshows planned in the US.

"144a issuance requires extra disclosure," said Giambattista Atzeni of BNY Mellon.

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