Saudi Arabias Bond Maturities To Surge To $168bn, Outpacing GCC Peers By 2029

RIYADH: Saudi Arabia is poised to account for the largest share of bond maturities in the Gulf Cooperation Council region from 2025 to 2029, with a projected total of $168 billion, according to a recent analysis by Kamco Invest.

The Kuwait-based financial firm’s report highlights that most of these maturities will come from bonds and sukuk issued by the Saudi government, which is expected to reach $110.2 billion over the five-year period.

This comes after Saudi Arabia’s Capital Market Authority approved its most significant regulatory overhaul in November, aimed at revamping the sukuk and debt instrument market.

The reforms include simplifying the prospectus requirements for public, private, and exempted offerings, streamlining processes, and reducing regulatory burdens.

Following Saudi Arabia, the UAE and Qatar will also see significant bond maturities, projected at $153.2 billion and $79.5 billion, respectively, over the same period.

In the UAE, a substantial portion of these maturities—around $120 billion—will be from corporate issuances. Meanwhile, Kuwait, with limited government bond issuances, will see the smallest maturities in the region, totaling just $15.1 billion.

Kamco Invest, referencing Bloomberg data, noted that sovereign bond maturities in the GCC will reach $232 billion between 2025 and 2029, while corporate bond maturities are expected to total $235 billion during the same timeframe.

Both sukuk and bond maturities are anticipated to remain high through 2025-2029 before gradually tapering off. The elevated maturities in the coming years are largely attributed to a surge in short-term issuances (with maturities of less than five years) in 2020 and 2021, as governments raised funds to cover budget deficits during the pandemic.

The report also revealed that banks and other financial sectors in the GCC face $169.9 billion in maturities over the next five years, making up approximately 72.3 percent of total corporate maturities. The energy sector follows with $25.3 billion in maturities, while the utilities and materials sectors account for $13.1 billion.

As of mid-December 2024, the aggregate value of bond and sukuk issuances reached $182.7 billion, up from $116.2 billion in 2023. The increase was driven by a 48.5 percent year-on-year rise in corporate issuances, which grew from $71 billion in 2023 to $105.4 billion in 2024. Government issuances also surged to $77.3 billion, marking a 71.1 percent increase compared to the previous year.

Kamco Invest further emphasized that while GCC economies will not be immune to the broader trends in the global fixed-income market, their relatively low levels of government borrowing, strong credit profiles, and substantial sovereign wealth funds should help mitigate potential negative impacts.

“Compared to other emerging markets, the GCC economies are in a more favorable position, as they are not burdened by the massive interest payments that other nations are facing on the $29 trillion of debt accumulated over the past decade,” the report concluded.