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Dubai: Emirates NBD, the largest banking group in the Middle East in terms of assets, has been ranked the number one mandated arranger for corporate deals in the UAE with 10.58 per cent share of the UAE market according to Reuters LPC/DealScan.
The bank has arranged deals valued at more than $23 billion since the beginning of 2008. It also topped the book runner league table a total of 10 deals valued at $14.7 billion. The bank is planning to play a big role in the Institutional Banking industry in the UAE and the region.
"The regional economies are booming and most companies want funds to cash-in on the current boom. Unfortunately the international bond markets are very expensive due to the crisis of confidence that followed the subprime mortgage crisis in the US. This has created a huge window of opportunity for syndicated loans," Rajan Khetarpal, deputy general manager and head of Global Debt Capital Markets and Overseas Corporates told Gulf News.
Despite the turmoil in the western markets, loan markets in the GCC have shown a remarkable resilience. While multi-billion dollar transactions have become common place, banks from the Far East and Europe are actively participating with large tickets in most of the mega transactions.
Keeping with the international trend, pricing has seen a significant upward adjustment mainly on account of increased funding costs for banks and is expected to stabilise in the fourth quarter of 2008 as the market finds new benchmarks.
Deals
Currently the regional syndication deals are priced anywhere between 100 to 300 basis points above the Libor. Compared to the international market, Khetarpal said the pricing in the bank loan market is cheaper.
However he hinted that the pricing could climb further as the interbank market is short of liquidity.
Commenting on the regional opportunities he said Emirates NBD is poised to expand operations of loan syndication to other GCC markets.
"Since the establishment of Emirates NBD, one of our key objectives was to build on our underwriting and distribution capability. We have been successful in attracting many banks from around the globe to invest in our transactions and this has enabled us to offer a wider array of products and more value added services to our corporate clientele," he said.
"We expect to replicate our success in the UAE to other regional markets," he added.
Emirates NBD expects loan volumes to grow at a steady pace on account of sovereign backed acquisitions and sizeable number of infrastructure related projects under way in the country. In addition, a large refinancing pipeline and the turmoil in the bond market would keep the market volatile.
Analysts expects the recovery of dollar and the subsequent decline in the speculative charm of dirham-denominated assets have seen a decline in demand for the nascent dirham denominated bonds. This combined with tight liquidity and wider spreads in international bond markets is expected to keep the syndication market strong for the next few quarters.
"We expect tighter credit structures to be introduced and the formation of large lead bank groups. This will result in further growth in our corporate banking activities and we are well positioned to capitalise on the opportunities that the local and regional market has to offer," he said.
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