Citigroup says syndicated loans in MENA region set for a slowdown

Citigroup recently predicted that the resurgence in syndicated loans in the MENA region seems set for a slowdown as the deal pipeline dries up.

As reported by Bloomberg,   loans in the region have surged 85% in 2018 to $33.4 billion, aided by a whopping $16 billion issue from Saudi Arabia.

Zain Zaidi, director for loans and acquisition finance at Citigroup, predicts that overall volume will probably climb to more than $70 billion. Syndicated loans in MENA fell 30% in 2017 to $82.9 billion.

He went on explains that on top of the loans already done this year, “there is at least another $8 billion to $10 billion of deals either in the market, or very sure of coming to the market right now.”

“Looking out at the rest of the year, there is probably some pipeline out of Saudi, there is some pipeline from UAE real estate. Beyond that, there is nothing firm, there are a couple of situations in Egypt,” he added.

Even so last year, syndicated loans in the MENA region dropped sharply last year as governments and companies cut back on projects amid low crude prices and slowing economic growth.

MENA syndicated-loan volumes also fell below bond sales for the first time in years as large borrowers preferred to sell bonds to avoid straining local bank liquidity.

Citigroup is one of largest loan providers in the region.

 

 

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