Qatar debt issuances offset regional lull, says S&P
Increased debt issuances from Qatar helped offset contractions across wider regional markets during the first half of 2026, even as total sustainable bond volumes in the Middle East fell under geopoli...
Throughout the first half of 2026, debt issuances from Qatar played a role in mitigating the contraction in regional markets despite overall drops in sustainable bond volumes in the Middle East, according to S&P Global Ratings. The report 'Sustainability Insights: Middle East Sustainable Bond Outlook Midyear 2026: Market Momentum Despite Headwinds' revealed that sustainable bond values in the region declined by 24% year-on-year from $10bn in H1 2025 to $7bn in the first half of the year.
S&P Global Ratings projected full-year issuance to fall between $15bn and $20bn, down from an earlier estimate of $20bn to $25bn. However, the report noted that this decline was less severe than the over 40% reduction in total bond issuance during the same period. Sustainable instruments exhibited greater resilience compared to the broader capital markets, where overall bond issuance plunged by more than 40%.
The UAE and Saudi Arabia remained the primary market leaders, accounting for around 98% of overall issuance by value. Qatari issuers' growth helped offset significant declines in other regional markets, including Turkey. Financial institutions were responsible for the majority of capital market activity, with 80% of issued sustainable debt by value and 87% by volume.
Amid market uncertainty, non-financial corporations refrained from issuing sustainable bonds, shifting instead to direct bank loans and private placements for debt refinancing. A ceasefire in April and the June memorandum of understanding between the US and Iran briefly encouraged issuances, with $2bn of sustainable debt brought to the market.
Elevated borrowing costs persist due to the Federal Reserve's decision to maintain interest rates due to anticipated monetary easing. S&P Global Ratings maintained a positive medium-term outlook for Gulf sustainable debt, anticipating a $50bn maturity wall between 2027 and 2030 to be refinanced. The agency highlighted the impact of national energy transition strategies, new bond structures like transition and blue bonds, and ongoing demand for sustainable sukuk to support medium-term demand.
Written by urgent.news from Gulf Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
