Activity in the first half of the year set a robust pace. Saudi Arabia remained the dominant force, raising $47.93 billion through 71 bond and sukuk issuances—accounting for just over half of all GCC debt issuance—despite this representing a 20 percent year‑on‑year decline from H1 2024. The UAE followed with $24.03 billion raised across 69 issues, marking a 22.2 percent increase, while Qatar, Bahrain, Kuwait and Oman also recorded notable activity across bonds and sukuk.
Citi projects this rebound will intensify. Victor Mourad, Co‑Head of CEEMEA Debt Financing at Citi, attributes the August lull to the heavy issuance in H1 and a natural pause as issuers recalibrate for Q3. With improving liquidity and potential rate cuts, he sees the second half trending toward pre‑funding strategies that could bring forward deals originally slated for early 2026.
The composition of issuance has shifted. Corporate debt rose sharply—up 67.7 percent in H1—underscoring rising confidence among non‑sovereign issuers. Conventional issuances outpaced sukuk, marking a shift in investor preferences and issuer strategy.
Across emerging markets, debt issuance has surged. Emerging‑market debt sales exceeded $190 billion in H1 2025, with the Middle East contributing more than 40 percent of CEEMEA volume. Debtors are increasingly exploring non‑USD funding, issuing in euros, yuan, yen and Swiss francs—signalling early signs of de‑dollarisation.
Looking ahead, issuance may skew towards shorter maturities. With yield curves steepening, issuers prefer three‑year papers over 30‑year bonds, offering flexibility for refinancing at lower costs.
The blue bond market continues its gradual emergence. In the Middle East, DP World became the region’s first issuer of blue bonds in December 2024, financing sustainable maritime and marine conservation initiatives. Globally, the blue bond market expanded to approximately US $7.2 billion by mid‑2024, including France’s Saur Group’s EUR 550 million issuance dedicated to water‑related sustainability projects.
Beyond conventional and green debt, Gulf issuers are pressing ahead with diverse offerings. Saudi Arabia’s Public Investment Fund is preparing a sukuk issuance between $1.5 billion and $2 billion. Abu Dhabi Ports Company plans a $2 billion bond, while Masdar aims to raise $1 billion via a green bond. These moves underscore resilience and expansive ambitions amid broader global market volatility.
The issuance landscape also reflects evolving sector-specific trends. Banks in Saudi Arabia introduced debut AT1 and Tier 2 capital instruments, with some refinanced in the UAE and Kuwait ahead of call dates—lending the region prominence as the largest issuer of USD‑denominated bank capital in emerging markets in 2025.
GCC sovereigns and corporates alike are adapting by diversifying funding sources, targeting shorter‑duration instruments, and experimenting with currencies beyond the dollar—a strategic response to shifting market dynamics and investor appetites.
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