Last year was one that saw HSBC in its best light in this region. The Middle East is not always an easy place in which to run a full-service investment bank. Some years are stellar; in others the well runs dry. But with energy prices up and governments committed to economic and financial diversification, there has never been a better time to be in the UK lender’s shoes.
It was way ahead of its rivals in debt capital markets, completing 57 deals in the awards period, worth a total of $14.4 billion, according to Dealogic data. In ECM it ranked second, completing nine deals worth $2.41 billion. And in advisory it was present on many of the region’s biggest M&A deals, completing 11 transactions worth $33.6 billion together, for a market share of just over 17%.
HSBC’s decades of experience in the region continue to pay off, even as it continually adds new strings to its bow. The bank ranked number one regionally in sustainability-linked loans and in green, social and sustainability bonds. A notable transaction in that space was Etihad Airways’ $1.2 billion sustainability-linked revolver, the largest of its kind in the carrier’s history. HSBC was joint environmental, social and governance (ESG) structuring bank and joint ESG coordinator on the deal.
In the United Arab Emirates, it spearheaded Fertiglobe’s IPO, which marked the first free-zone firm to list onshore on the Abu Dhabi Securities Exchange. The offering was more than 22 times oversubscribed, with investor appetite driven by strong business fundamentals and a robust dividend policy. HSBC was joint global coordinator on the sale, which bankers see as a toolkit for other free zone-based companies seeking to sell shares onshore in the coming years.
In Saudi Arabia, Nahdi Medical’s $1.36 billion IPO soared on debut in March 2022, after the pharmacy retail chain completed the kingdom’s largest-ever private-sector initial stock offering – and the biggest domestic share sale since Aramco’s. HSBC was joint financial adviser and joint global coordinator, with a focus on educating institutional investors about a name new to the capital markets.
In DCM, HSBC was placement agent and dealer manager on Saudi Arabia’s SR33.5 billion ($8.93 billion) sukuk in November 2021 and joint sustainability structuring agent and joint global coordinator on Riyad Bank’s $750 million tier-1 sustainability sukuk in February 2022. And it was joint global coordinator on ADQ’s $4.5 billion dual-tranche financing facility: the most widely syndicated UAE transaction in nearly a decade was sharply upsized due to strong investor demand.
The already substantial appetite of global investors for exposure to the region is increasing through direct investment, mergers and acquisitions
Gareth Thomas
In advisory, HSBC was sole financial adviser to EIG on its $12.4 billion acquisition of a 49% stake in Aramco Oil Pipelines and CMC on its $15.5 billion purchase of a 49% stake in Aramco Gas Pipelines, as Saudi Arabia hones its long-term financial and economic diversification strategy.
HSBC played a key role in every important UAE stock offering of the past year. Wherever the activity was, the bank was there, whether it was priced in dollars or euros, Saudi riyals or sterling, and whatever form it took, be it a sukuk or a formosa bond. And with the region’s capital markets growing wider and deeper each year, this is just the start.
“New listings are soaring, billions of dollars are being raised to drive long-term investment through the debt and equity markets, and the already substantial appetite of global investors for exposure to the region is increasing through direct investment, mergers and acquisitions,” says Gareth Thomas, regional head of global banking for HSBC in the Middle East, North Africa and Turkey.
