Deals of the Year 2023

A look at the year's most noteworthy deals in the Middle East.

Bonds: Corporates

Mubadala’s $1bn Formosa offering 

Bookrunners: HSBC, Société Générale

Structuring agents: Abu Dhabi Commercial Bank, Bank of America, First Abu Dhabi Bank, Intesa Sanpaolo, MUFG 

Abu Dhabi’s second-biggest sovereign wealth fund, Mubadala, has a portfolio that ranges from pharmaceutical glass to data centres and banking. Mubadala also founded and remains a major shareholder in Masdar, the Abu Dhabi-based clean energy company, which is active in more than 40 countries.

In 2022, Mubadala was the only investment-grade corporate in the Gulf Co-operation Council (GCC) to issue bonds twice, through its issuing entity Mamoura Diversified Global Holding. 

After successfully issuing a $1.5bn dual-tranche five- and 10-year Regulation S-only offering in March amid much market turmoil, it came back to the international debt capital markets for a second time in October with a $10bn 10-year 144A/RegS dual-listed senior unsecure Formosa bond, which is issued in Taiwan in foreign currency.

The transaction marks the first ever US dollar-denominated Formosa bond by a corporate issuer. 

With US bidders returning to the market, reliance on the Middle East was reduced. The Formosa issue achieved a final orderbook of more than $4.6bn (excluding joint lead manager interest). The offering saw strong demand from both international accounts, as well as regional names, primarily from UAE banks. The transaction also witnessed strong participation from real money accounts, with 65% of the offering being allocated to fund managers.

In the volatile climate, Mamoura monitored the market closely for a suitable moment for the releases, successfully identifying a ‘risk-on’ day in October to achieve the best pricing. The issue priced at US Treasury +165 basis points (bps), which represents a 35bps tightening from initial price thoughts. Mamoura achieved a new issue premium of 15bps, against an average of 20bps for the day and 25bps for central and eastern Europe, Middle East and Africa across 2022. 

The issue marked Mamoura’s return to the 144A market with a first issue in the format since November 2019.

Bonds: Sovereigns, supras and agencies

Saudi Arabia’s jumbo $10bn bond issuance 

Bookrunners: BNP Paribas, Citi, Goldman Sachs, JPMorgan, SNB Capital, Standard Chartered Bank 

While much of the rest of the world has been buffeted by economic storms due to the war in Ukraine, Saudi Arabia saw gross domestic product growth hit 8.7% in 2022, according to official figures, the highest rate in a decade and taking the economy through the $1tn barrier for the first time. This follows some years of lower growth for the country, and may bolster its confidence in driving forward a range of megaprojects and diversification programmes.

With the largest emerging market (EM) sovereign issuance since April 2020 and the largest EM issuance by any entity since June 2021, Saudi Arabia raised $10bn in a three-tranche bond offering in January 2023. The issue consisted of a $3.25m five-year tranche, a $3.5m 10.5-year tranche and a $3.25mn 30-year offer.

The government moved swiftly to capitalise on positive market sentiment and high liquidity at the start of the year to pre-fund a substantial portion of the coming year’s financing needs. 

This proved successful, as it achieved a final orderbook of $38bn (excluding joint lead manager interest) — the highest achieved by any EM issuer over the past 12 months. The demand allowed the issuer to tighten pricing by 30 basis points (bps) from initial price thoughts on each tranche. 

The country’s proactive approach to attracting new investors paid off, with several newcomers participating. Final pricing was Treasury +110 basis points (bps) for the five-year, T+140bps for the 10.5-year, and 5.5% (T+172.4bps) for the 30-year issues, respectively.

The deal was geographically well-represented, with interest from Asia and UK/Europe making up more than half of the investors across the three tranches. In terms of investor type, fund managers made up the majority. 


Americana Restaurants’ $1.8bn dual listing 

Financial adviser: Rothschild & Co

Joint global co-ordinators: First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley, SNB Capital

Joint bookrunners: EFG Hermes, HSBC 

Americana Restaurants is the largest restaurant operator in both the Middle East and north Africa region by number of restaurants, with more than 2050 outlets in 12 countries. It operates global brands including KFC, Pizza Hut, Krispy Kreme and Hardee’s, as well as having proprietary brands including Wimpy and Chicken Tikka.

In December 2022, the company launched a $1.8bn initial public offering (IPO) on the Abu Dhabi Securities Exchange and the Saudi Stock Exchange. The offering of 30% of Americana was the largest simultaneous dual listing on the bourses and the largest ever consumer IPO in the Middle East. The listing structure, specifically designed for Americana by advisers including Rothschild & Co, is expected to open the way for further dual listings in the region. A dual listing allows investors seamlessly to transfer their holdings between the two exchanges, boosting fungibility.

The transaction took meticulous planning, a seven-day management roadshow and required day-to-day monitoring to ensure the right pockets of demand were addressed. The investment returns proposition (and therefore value) focused around growth and margin improvements rather than dividend yield, which was far less familiar to local investors than more defensive and yield-oriented business models.

The IPO proved extremely popular with investors, generating $105bn of total demand, a remarkable 58-times aggregate gross oversubscription; the institutional offer was 66 times oversubscribed. Allocation at offer price was 49% to Saudi-based investors, 31% to the UAE, and 20% international; 44% went to long-only funds, and 20% to retail investors. The company’s brand strengths are complemented by strong unit economics, efficient capital deployment and a strong digital platform.

Advisers on the deal managed the interests of Americana’s multiple shareholders, as well as both domestic and international banks. They also supported the company in developing a five-year business plan for its 12 brands across 13 geographies. 

Financial institutions group financing  

Mashreqbank’s inaugural Tier 2 issuance 

Bookrunners: Abu Dhabi Commercial Bank, Barclays, Emirates NBD, First Abu Dhabi Bank, Mashreqbank, Mizuho 

Established in 1967 and the oldest domestic commercial bank in the UAE, Mashreqbank is the largest private lender in the country. Now present in 13 countries across the Middle East, Africa and Asia, it had total assets of $54.1bn as of end-2022. It is also an active investment bank, ranking third in the Gulf Co-operation Council (GCC) for bookrunning across syndicated loans and fourth for bonds and sukuks in 2022. 

In the year, it executed more than 15 debt capital market transactions worth upwards of €25bn, including two debut issuers. For the year, 67% of revenue came from non-UAE deals, and 39% from non-GCC deals, with activity in 25 markets as far afield as Nigeria, Bangladesh and Vietnam — including markets where it does not have a physical presence.

In November 2022 Mashreq launched and priced $500m of Reg-S Tier 2 10.25-year notes by intra-day execution on the Luxembourg Stock Exchange. The notes are non-callable for 5.25 years. It was the first Tier 2 bond issue by Mashreq and the first from the UAE in nearly a decade. 

On the back of a good shadow orderbook from global investors, books opened on November 17 at UAE open, with initial price thoughts being released at 8.250% with intention not to grow the book over $500m. By noon UAE, the books were in excess of $1.4bn and guidance released 8% (+/- 5bps) will price within range area. By 5pm UAE, the yield was set at 7.950%, 30 basis points below initial price talks.

The issue represented Mashreq’s second capital instrument issuance of 2022, following a first additional Tier 1 issue in June. The Tier 2 issue was well received, with a 2.8-times oversubscription and a diversified orderbook, with 42% European investors and 70% real money accounts. 

Infrastructure and project finance

GreenSaif’s multi-tranche $4.5bn project bond 

Bookrunners: Abu Dhabi Commercial Bank, BNP Paribas, Bank of America, Citi, Crédit Agricole, First Abu Dhabi Bank, HSBC, JPMorgan, Mizuho, MUFG, Société Générale, Standard Chartered Bank, Sumitomo Mitsui Financial Group 

Lead managers: Agricultural Bank of China, Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Natixis, Riyad Bank 

In February 2022, GreenSaif Pipelines Bidco, a company owned by investors led by BlackRock and Saudi state insurance investor Hassana, acquired a 49% stake in Aramco Gas Pipelines Company (AssetCo) from Saudi state-owned Aramco, which months later surpassed Apple to become the world’s largest company by market capitalisation. 

The deal valued AssetCo at $31.6bn, reflecting very favourable 20-year agreements that it has with Aramco, which retains a 51% stake. The contract guarantees AssetCo tariff payments for transporting Aramco’s gas products, while providing a minimum volume commitment that effectively removes volume and availability risk. Aramco has also committed to paying all operational, maintenance and capital costs related to the pipelines, liability for any increased taxes in Saudi Arabia, as well as to make termination payments to cover all senior debt on early termination of the transport agreement. 

In February 2023, GreenSaif issued a $4.5bn multi-tranche 144A/RegS offering — the proceeds of which will be used partly to refinance the $13.4bn bridge facility for the AssetCo acquisition. The issue included the first project bond in sharia-compliant format, a $1.5bn 5.780%, 7.5-year sukuk certificate, and the first dual-listed Formosa project bond, a $1.5bn 6.510% tranche with 17.8-year tenure listed both in Taipei and the London Stock Exchange. The third tranche came in $1.5bn of 12.3-year conventional notes at 6.1%. 

The mix of instruments allowed the issuer to reach a wider investor base, and achieved the largest ever orderbook for a Middle East and north Africa project bond, in excess of $20bn (4.4-times oversubscription). This allowed a 30-basis point (bps) tightening on the bonds and 40bps on the sukuk. 

Islamic finance

Riyad Bank’s $750m sukuk 

Bookrunners: Bank of America, HSBC, Riyad Bank, Standard Chartered Bank 

On February 9, 2022, Saudi Arabia’s Riyad Bank issued a $750m perpetual additional Tier 1 (AT1) RegS sukuk, with a 5.5-year non-call limit. Demand for the issue, the bank’s first-ever dollar-denominated AT1 sustainability offer in the international debt capital markets, was so strong that the issuer was able to upsize from an initial $500m. 

The issue saw a rapid take-up in during the course of the morning in the Middle East coming into London opening, and an update to the market signalling books in excess of US$1.8bn (excluding joint lead managers’ interest) was released around the UK open.

The orderbook closed at $3bn, a four-times oversubscription, driving pricing of 4%, 37.5 basis points below initial price talks and the tightest credit margin ever achieved by a Gulf Co-operation Council bank’s AT1 sukuk at the time of issuance. 

The offering was marketed in Reg S-only format and followed a two-day marketing exercise, which was well attended by global investors It was a successful execution strategy, through two steps pricing revisions. Fund managers took 61% of allocation, banks 37%, and insurance and pension funds 2%.

The transaction debuted Riyad Bank’s sustainable finance framework, which follows the International Capital Market Association and the Loan Market Association’s principles for green, sustainability, and social bonds and loans. The bank aims to become a regional leader in environmental, social and governance concerns.

Riyad Bank said before the issue that the sukuk would support its capital base and meet financial and strategic needs. AT1 bonds and sukuks are also known as ‘contingent convertibles’ are designed to be converted to equity — or written off — if a bank’s capital falls below a certain level. They are thus the riskiest type of bond issued by banks and are priced accordingly. 

High-yield and leveraged finance

AIR’s $525m syndicated term facilities 

Bookrunners: Commercial Bank of Dubai, Credit Suisse, First Abu Dhabi Bank, Mashreqbank, Standard Chartered Bank 

Dubai-based Advanced Inhalation Rituals (AIR) focuses on a particular niche: products for shisha pipes. These include the Al Fakher shisha molasses brand, which the group distributes to more than 100 territories and has manufacturing capacity in the UAE, Egypt and Poland. 

Its majority owner is Kingsway Capital, a UK-based consumer-focused private equity fund targeting frontier markets, with $2bn in assets under management. Kingsway initially invested in Amman-listed Al Eqbal Investment Company, which owned the Al Fakher brand, in 2018, taking it private in 2020 and renaming it AIR; it now holds a 54% stake.

Kingsway asked Mashreq and other lenders to structure senior secured term facilities to refinance AIR’s existing term debt (which was established when the company was delisted) and to provide incremental liquidity to exercise a call option to acquire shares from another existing shareholder. The deal was sealed in September 2022, structured as a five-year senior secured-term loan, with an extensive security arrangement supported by guarantees from material companies and other structural mitigants as required by the underwriters, and three-year revolving credit facility (RCF). 

The term loan will be used to refinance existing debt and fund the buyout of an existing shareholder of the ultimate holding company (through exercise of call-option). The RCF will be used for general corporate purposes.

Through the transaction, Kingsway was able to capitalise on AIR’s strengthening financial position, and raise non-recourse financing for funding pay-out under the call option prior to its November 2022 expiry. Its closure reinforces the fund’s position as AIR’s largest shareholder in the run-up to an initial public offering expected in the coming years.


PIF’s giant $17bn term loan facility 

Bookrunners: Bank of America, BNP Paribas, Citi, Crédit Agricole, First Abu Dhabi Bank, HSBC, JPMorgan, Mizuho, Sumitomo Mitsui Financial Group

Mandated lead arrangers: Abu Dhabi Commercial Bank, Agricultural Bank of China, Bank of China, Barclays, Emirates NBD, Goldman Sachs, Industrial and Commercial Bank of China, MUFG, National Bank of Kuwait, Santander, Standard Chartered Bank, State Bank of India

Arrangers: Credit Suisse, ING, Morgan Stanley, Société Générale 

Saudi Arabia’s Public Investment Fund (PIF) is one of the world’s largest sovereign wealth funds, gaining global profile in recent years with deals including the acquisition of English football club Newcastle FC. The fund is also playing an increasingly important role in the domestic economy. 

In 2020, Prince Mohammed bin Salman said that the fund would invest $40bn annually in Saudi Arabia to 2025. The fund is targeting SR7tn ($1.87tn) of assets by 2030, up from SR1.3tn in 2020. Domestic projects backed by PIF include the huge Neom economic zone and planned smart city starting to take shape by the Red Sea.

In August 2022, PIF took to the markets to secure the largest-ever loan for general corporate purposes raised globally, a $17bn package from 25 banks. Part of the fund’s medium-term capital raising strategy and its 2022 annual capital raising plan, the deal was structured as a seven-year bullet loan which allows the fund to refinance a $11bn, five-year loan taken out in 2018, thus extending the maturity while increasing the debt value. 

The transaction used a compounded secured overnight financing rate (SOFR) mechanism, more favourable to the issuer in pricing and liquidity than the term SOFR agreements commonly used for loan transactions originating from Saudi Arabia and the broader Middle East and north Africa region.

The new deal diversifies PIF’s funding sources, as the original loan was taken from 15 banks, and upsized its existing loan by $6bn. Institutions from Asia, the Americas, Europe, and the Middle East participated, and the expanded banking group is testament to PIF’s growing profile, as well as continued confidence from relationship financial institutions. It also reinforces PIF’s ability to raise financing at competitive terms, despite volatile market conditions.


KFH’s $11.6bn acquisition of Ahli United Bank 

Advisers to Kuwait Finance House: Goldman Sachs, HSBC, Morgan Stanley 

Adviser to Kuwait Investment Authority: Bank of America

Advisers to Ahli United Bank: Citi, Credit Suisse  

One of the three biggest banking mergers and acquisitions (M&A) transactions globally in 2022, Kuwait Finance House’s (KFH’s) $11.6bn acquisition of Bahrain’s Ahli United Bank (AUB) created the world’s second-largest Islamic bank and the sixth-largest bank by assets in the Gulf Co-operation Council (GCC). 

A cross-border transaction combining two national banking ‘champions’ with regional presence, the deal is the first banking merger of its kind in the Middle East. It was the largest financial institutions M&A in Europe, the Middle East and Africa in 2022, the largest financial institutions group deal in Middle East and north Africa in the past two years, and the largest public M&A deal in Bahrain and Kuwait in the past decade. 

The deal was executed as a voluntary conditional offer via a share-swap, with the valuation implying a price-to-book ratio of 2.7 times and a price-to-earnings ratio of 18.1 times (on annualised figures for the first half of 2022) for AUB, and a 31% stake in the new merged bank for AUB’s shareholders.

The merged entity has assets of around $121bn, a market capitalisation of $39bn, and is the biggest bank in both Kuwait and Bahrain, with a 27% market share in the former. It has a combined presence in 12 markets in Asia, Europe and Africa, giving KFH entry to six new markets. Following the merger, AUB’s Kuwaiti subsidiary will be converted into a digital Islamic bank, one of the first in the GCC.

Impressively, the deal was executed under difficult market backdrop post-Covid 19 pandemic and in an environment of heightened macro and foreign exchange volatility (in particular in Turkey and Egypt where KFH and AUB, respectively, have meaningful subsidiaries). The transaction is expected to be credit positive based on lower credit risk arising from enhanced size and synergies.


Gargash’s refinancing and repricing solution 

Mandated arrangers on $484m refinancing facility: Abu Dhabi Commercial Bank, Emirates NBD, Mashreqbank  

Established in 1958, Gargash Enterprises is one of the largest vehicle dealerships in the UAE, distributing brands including Mercedes. In November 2022, the company signed a deal with three lenders fully to refinance and underwrite Dh1.78bn ($484.6m) in debt. The funds will be used further to develop the company’s automotive business.

The original Dh1.84bn transaction was provided by Mashreq to finance an acquisition and was refinanced by four lenders with an Dh1.94bn package in November 2020. The new deal is designed to amortise over 10 years, with a balloon of over 20, and is largely predicated over the company’s operating cashflow. 

Cashflow from the company’s real estate division will be routed through a collection account pledged to lenders and will be used for debt servicing as a priority. The 10-year extended repayment period gives Gargash the flexibility to preserve liquidity, while the lenders benefit from a pricing rachet liked to leverage, cash sweep prepayments and tighter covenants.

Mashreq fully underwrote and pre-funded the term loan, subsequently down-selling 45% of the term loan and revolving credit facility to two other lenders. The new lenders were brought into the syndicate through extensive discussions that overcame a range of complexities. Credit approvals and the execution of facility documentation was achieved within tight timelines.

Sustainable finance

PIF’s $3bn green bond 

Global co-ordinators: BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, JPMorgan

Active bookrunners: Crédit Agricole, First Abu Dhabi Bank, HSBC, Mizuho, SMBC Nikko, SNB Capital, Société Générale, Standard Chartered Bank

Passive bookrunners: ANB Capital, Bank of America, Bank of China, GIB Capital, ICBC, IMI Intesa Sanpaolo, Morgan Stanley, MUFG, Natixis, Riyad Capital, Saudi Fransi Capital

Joint green structuring banks: Crédit Agricole, Standard Chartered Bank 

With the largest-ever emerging market (EM) bond offering, and the first ever green bond issued by a sovereign wealth fund (SWF) globally, Saudi Arabia’s Public Investment Fund (PIF) broke new ground in its $3bn October bond issue.

The Reg S-only offer consisted of a $1.25bn five-year tranche, a $1.25bn 10-year tranche and a $500m 100-year tranche. The 100-year issue was not explicitly mentioned in the initial mandate, but was included following strong investor feedback.

It is the first-ever century bond issued by an SWF, the first-ever century public green bond issued globally, the first century bond from the Middle East, and the first EM 100-year issue since 2020. 

The issue generated an orderbook of $22bn from more than 270 investors across the three tranches, a more than eight-times oversubscription, with the five-year tenure more than nine times oversubscribed. 

Yields tightened considerably over initial price talks, settling at a 5.2% re-offer yield, 5% coupon; 5.4% re-offer yield, 5.25% coupon; and 6.7% re-offer yield, 5.4% coupon for the five-year, 10-year, and 100-year issues, respectively. Fund managers dominated in all three tranches (68%, 68% and 92%). The Saudi fund benefitted from its inaugural ratings, obtained in February 2022, scoring A from Fitch and A1 from Moody’s.

One of the founding members of the One Planet SWF Network in 2017, PIF plans to use the proceeds to fund green assets including renewable energy, green buildings, sustainable water management, clean transportation, and pollution prevention and control. Issuing a green bond fits PIF’s mandate of investing to diversify Saudi Arabia’s economy away from hydrocarbons, and the transaction underlines both investor confidence in the fund and Saudi Arabia’s transition more broadly.


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Top 1000 2023

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter