Issuers across the Middle East and Turkey wasted little time stepping into debt markets at the start of the year, choosing speed over hesitation as global uncertainties loomed large. From sovereigns to banks and corporates, the message was clear: lock in favourable pricing now, before shifting geopolitics and macro risks redraw the cost of borrowing.
In just the first two weeks of January, bond and sukuk issuance from the region crossed the $31 billion mark, marking one of the strongest openings to a year in recent memory. Saudi Arabia and the UAE were at the forefront, with Turkey close behind, setting the tone for what many expect to be a busy year.
Saudi Arabia once again led from the front, launching an $11.5 billion multi-tranche US dollar bond early in the year. The kingdom has outlined borrowing plans of nearly $58 billion for 2026, with international markets expected to supply a significant portion of that total. Turkey followed a similar playbook, raising $3.5 billion through a dual-tranche dollar bond, aligning with its stated external borrowing target of $13 billion for the year.
The UAE, by contrast, does not publish a pre-set annual borrowing programme. Instead, issuance there tends to follow refinancing needs and market windows. Upcoming maturities—such as Abu Dhabi’s obligations due in May and Sharjah’s in April—are widely seen as natural triggers for further deals.
What is drawing issuers in now is a rare alignment of conditions: credit spreads are hovering near multi-year tights, and overall funding costs remain attractive. Market participants estimate that issuance volumes this year could exceed last year’s levels by roughly a quarter, building on a 2025 total of about $172 billion from the region.
Beyond a Single Flashpoint
While regional tensions, including uncertainty surrounding Iran, remain part of the backdrop, issuers are looking far beyond any single hotspot. Global risks—ranging from US political developments to broader macroeconomic fragility—are shaping decision-making.
The calculation, bankers say, is straightforward. There is limited room for spreads to tighten further, but ample scope for them to widen sharply if a major shock hits. In that context, issuing early is less about fear and more about balance: securing certainty today rather than gambling on calm tomorrow.
Even when it comes to Iran, the market sees mixed outcomes. Escalation could spark a flight to quality, easing yields, but it could just as easily disrupt oil supply and push prices—and inflation expectations—higher. Either way, uncertainty is the constant.
Banks and Corporates Join the Rush
Financial institutions were particularly active, with Saudi banks tapping markets for regulatory capital. A series of AT1 and senior instruments priced smoothly, reflecting strong demand for high-quality regional credit. Banks from Kuwait and Qatar also joined in, alongside issuers from the UAE.
Quasi-sovereign names added heft to the supply, including utilities, telecom operators and energy companies with government backing. These were complemented by a diverse set of corporate deals, from green bonds tied to renewable energy projects to hybrid notes and aviation finance bonds.
Taken together, the early surge tells a broader story. Issuers are not reacting to a single risk, but to an environment where uncertainty feels cumulative. With markets still receptive and pricing favourable, many have chosen to act first—before the calm gives way to turbulence.
