By Bindu Rai
Bankers in the MENA region expect renewed momentum in regional bond issuance in the second half of 2026, with volumes projected to “remain elevated and growing” despite a protracted Iran conflict. The number of bond issues fell 14% year-on-year in the first half, according to LSEG data.
“We continue to see a healthy pipeline heading into Q4 and early next year,” a senior executive at a regional investment bank told Zawya. “Financial institutions, sovereign-related entities, and the energy and utilities sectors are likely to remain active, supported by ongoing investment programmes and funding requirements linked to economic diversification agendas across the region.”
The bank said new debut issuers, predominantly corporate and investment-grade names, are expected to come to the market in the fourth quarter of 2026.
The sentiment comes on the heels of Kuwait’s $6 billion debt raise last week.Market volatility
Overall bond value in the region rose 6% year-on-year to total $96.9 billion, tracking higher following a flurry of transactions in January that included a $11.5 billion debt raise by Saudi Arabia, coupled with Saudi Aramco’s $4 billion multi-tranche bond sale that drew orders exceeding $21 billion.
After a bullish start in January, led by Saudi Arabia, issuance volumes in the MENA debt capital markets dropped substantially as the US-Iran conflict weighed on market sentiment. Activity began to recover gradually in April and May as markets reopened.
June saw an uptick in issuance volumes as issuers that had stayed on the sidelines during the conflict chose to execute transactions while markets remained open and geopolitical risks appeared contained due to ceasefire.
Islamic bonds in the region were the most impacted, LSEG reported, with a 36% year-on-year decline in H1 to $21.8 billion. Sukuk accounted for 23% of total bond proceeds raised in the region, the lowest share in five years.
Top banks
JP Morgan took the top spot on the MENA bookrunner league table during the first half of 2026, accounting for $12.6 billion of related proceeds or a 13% market share in the region across 34 issues.
The bank’s biggest MENA DCM deals included a $3 billion execution of seven-year private placement for Qatar as the sole arranger and placement agent in April, during the peak of the Iran conflict. The same month, the bank also led a $750 million AT1 deal for Emirates NBD bank, which also marked the reopening of the public bond market from the GCC since the onset of the war.
In May, the bank also led a $7 billion triple-tranche bond issuance for Saudi Arabia’s Public Investment Fund.
HSBC took second place on the MENA DCM bookrunner league table with 44 issues and accounting for 10.1% of the total market share in the region with H1 proceeds in excess of $9.74 billion.
The bank also topped the MENA Islamic bonds league table with 17 issues, accounting for 12% of the market share with $2.62 billion in proceeds.
Standard Chartered came in third with the highest number of debt issuances in the region, accounting for 51 out of the total 114 in H1, with $9.22 billion in proceeds and 9.5% of the total market share. The bank was ranked second on the MENA sukuk bookrunner table with $1.55 billion in proceeds, followed by Emirates NBD with $1.39 billion in proceeds.
Saudi was the most active issuer nation, accounting for 45% of total bond proceeds raised, followed by the UAE (28%), and Qatar (12%). Sector wise, financial issuers accounted for 45% of proceeds raised during H1 2026, while government and agencies accounted for 30%.
(Writing by Bindu Rai, editing by Seban Scaria)