Fed Hike to Raise Gulf Borrowing Costs, but Bond Demand Holds
Dow Jones
Yesterday
1338 GMT - The Federal Reserve's rate increase will raise borrowing costs for Gulf issuers, though investor demand for regional bonds and sukuk remains resilient. Saudi banks could face particular pressure as loan growth continues to outpace deposits, making sukuk an increasingly important source of longer-term funding. Recent Saudi and Kuwaiti sukuk deals priced tighter than initial guidance, indicating demand remains healthy despite higher rates. Spreads are holding up, but overall funding costs are set to rise, potentially encouraging stronger issuers to accelerate borrowing ahead of further possible Fed increases.
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