Loans vs. Sukuk: Cost of Funding Dilemma

Gulf Cooperation Council (GCC) syndicated loans (Islamic and conventional) had one of the strongest years in 2021.The total of GCC syndicated loans (denominated in US dollars) that was raised in 2021 reached a total of USD 104.4 billion, compared to USD 68.6 billion raised in 2020, according to Refinitiv.It should be noted that the number of deals has significantly increased from 54 in 2020 to 80 in 2021, according to Refinitiv data.

Debt Deals

What is more surprising to market observers was the fact that GCC borrowers preferred syndicated loans in 2021 (this came on the account of fixed income deals). It should be noted that the total of GCC debt capital deals (including Sukuk and bonds) that was raised from the international market was USD 101 billion...