Sign in
The UAE was the second biggest issuer of ESG sukuk in 1H 2024, accounting for 33.8% of issuances and trailing only behind Saudi Arabia, which took to market 43% of issuances, according to the latest report by Fitch Ratings.
The global stocktake: Outstanding global ESG sukuk surged 41% y-o-y to USD 43 bn in 1H 2024,The GCC region accounted for 43% of issuances, with USD 18.5 bn in outstanding ESG sukuk.
The highlights: Fitch noted Emirates Islamic Bank’s USD 750 mn green sukuk and Aldar Properties’ USD 500 mn green sukuk among the biggest ESG issuances taking place during the period.
ESG bonds fell slightly during 1H: In the core Islamic finance markets, which include the GCC, Malaysia, Indonesia, Turkey, and Pakistan, ESG bonds fell 34% y-o-y to USD 7.8 bn during the first six months of 2024.
Looking ahead: Fitch anticipates a slowdown in issuances during 3Q 2024 amid the seasonal lull. However, the nascent market is expected to pick up in 4Q 2024, driven by “governments’ increasing commitment to sustainability and issuers’ aims to meet ESG mandates and funding diversification plans,” the ratings agency said. Furthermore, the overall debt market is expected to grow by the end of the year and early 2025 on the back of lower oil prices and the anticipated interest rate cuts.
More issuances incoming: Qatar Central Bank’s new ESG and sustainability strategy, coupled with existing frameworks in the UAE, Saudi Arabia, Oman, and Malaysia, is expected to further ramp up ESG debt markets. The promising medium-term potential for ESG debt issuance is fuelled by governments’ increasing commitment to sustainability, and issuers’ aims to meet ESG mandates and funding diversification plans,” Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings said.
MORE DEBT NEWS-
Equitativa redeems USD 19.27 mn sukuk: Equitativa, the manager of Emirates NBD’s real estate investment trust (REIT), has redeemed USD 19.27 mn of Emirates REIT’s USD 380 mn sukuk certificates yesterday, according to a bourse disclosure. Equitativa was able to redeem the sukuk following the sale of Trident Grand Mall last month. Its outstanding sukuk now stand at USD 304.73 mn.
Background: The REIT recently said it was exercising a one-year extension option on its sukuk, with sukuk documents showing that it must reduce the outstanding balance to USD 230 mn by 12 December. The REIT had previously redeemed USD 56 mn of the sukuk in March 2023 (pdf).
