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Mon 30 Apr 2018 05:00 PM

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Citigroup sees MENA syndicated loans at over $70bn

Loan arranger says resurgence in syndicated loans in region seems set for a slowdown as the deal pipeline dries up

Citigroup sees MENA syndicated loans at over $70bn

The resurgence in syndicated loans in the Middle East and North Africa seems set for a slowdown as the deal pipeline dries up, according to Citigroup.

Loans in the region have surged 85 percent in 2018 to $33.4 billion, helped by a jumbo $16 billion issue from Saudi Arabia, according to data compiled by Bloomberg.

Overall volume will probably climb to more than $70 billion, according to Zain Zaidi, a director for loans and acquisition finance at Citigroup, the region’s biggest loan arranger. Syndicated loans in MENA fell 30 percent in 2017 to $82.9 billion.

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,’’ Zaidi said in an interview at his office in the Dubai International Financial Centre.

“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.”

Syndicated loans in the oil-producing 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.

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