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The Gulf Cooperation Council (GCC) bond and sukuk market delivered a mixed but revealing performance in the first half of 2026. Total primary issuance grew to $102.69 billion, a 6.5% increase from H1 2025, yet the number of individual transactions plunged by a quarter . The result was a market defined by fewer, larger deals, a decisive shift toward conventional US dollar-denominated bonds, and a dramatic geopolitical interruption that reshaped the issuance calendar.

Total Issuance Volume and Growth

Primary bond and sukuk issuance in the GCC reached $102.69 billion across 161 deals in H1 2026, compared to $96.42 billion in H1 2025, according to Kuwait Financial Centre (Markaz) . A separate estimate from Kamco Invest, which uses a broader instrument definition, pegs total issuance at roughly $116.8 billion, up approximately 14% year-on-year . The discrepancy reflects different counting methodologies: Markaz reports primary market issuance only, while Kamco's figure includes a wider set of instruments.

Aranca Research notes that total 2026 issuance through June stood at $83 billion against $57 billion in maturities, indicating that the market is not only growing but also successfully refinancing a significant wall of debt .

Decline in Deal Count and the Rise of Jumbo Issuances

The number of deals fell sharply from 215 in H1 2025 to 161 in H1 2026, a 25% drop . This decline in deal count with rising total volume implies a substantial increase in average deal size. Calculations based on Markaz data show the average deal grew from roughly $430 million to about $638 million . The shift was driven by large sovereign and quasi-sovereign jumbo issuances, as governments and major state-linked entities consolidated their borrowing into fewer, larger transactions.

Country Breakdown: Saudi Arabia Leads, Kuwait Doubles, Bahrain Contracts

Markaz's H1 2026 report provides a detailed country-by-country picture :

• Saudi Arabia: $49.34 billion through 58 deals — 48% of the GCC total, a modest 1.6% increase year-on-year. The Kingdom remains the dominant force in the regional debt market .
• UAE: $23.54 billion through 42 deals — 23% of GCC total, maintaining its position as the second-largest issuer .
• Qatar: $9.9 billion — a 32% increase year-on-year, fueled by major issuances from QatarEnergy and Dukhan Bank .
• Kuwait: $8.7 billion — more than doubled from H1 2025, largely driven by strong activity in the financial sector .
• Bahrain: $4.0 billion — a decline from prior periods, reflecting tighter fiscal conditions and reduced borrowing requirements .
• Oman: $1.8 billion — a slight rise from H1 2025, continuing a gradual recovery in issuance .

Conventional USD Bonds Surge; Sukuk Faces Headwinds

A defining theme of H1 2026 was the decisive tilt toward conventional US dollar-denominated bonds. Kamco Invest data shows conventional bond issuance rose approximately 41% year-on-year to $86.4 billion, while sukuk issuance declined roughly 26% to $30.5 billion . This represents a sharp reversal from H1 2025 trends.

However, this picture requires nuance. S&P Global Ratings reported that GCC sukuk issuance rose 13.1% in the first four months of 2026, driven primarily by Saudi local-currency sukuk (SAR-denominated), which benefited from widening yield spreads against USD benchmarks . Aranca notes that sukuk still accounts for over 30.5% of outstanding GCC USD credit market securities, indicating a substantial installed base even as new issuance flows shift .

Financial Sector Leads Borrowing

Financial institutions were the largest borrower category in H1 2026. Banks and financial firms dominated issuance as they refinanced maturing debt and raised capital for expansion. Aranca reports that "financials led growth" in the GCC credit market . Major H1 issuances included Emirates NBD, First Abu Dhabi Bank, and Dukhan Bank .

Geopolitical Shock and Recovery: The Iran-U.S. Conflict

The market experienced a sharp sell-off in late February 2026 after the Iran-U.S. conflict erupted. Yield spreads widened dramatically, and according to LSEG data, the GCC market "effectively ground to a halt in March" as issuers paused transactions . Fitch Ratings noted that borrowers "effectively frozen new USD bond and sukuk sales" during the peak of the crisis .

A distinct relief rally began after the Iran-U.S. ceasefire on April 8, 2026, with GCC debt markets steadily recovering . Investment-grade spreads returned to pre-war levels by mid-June . The recovery revived issuance activity sharply — a combined $7.5 billion in debt was issued by QatarEnergy, AviLease, Emirates NBD, First Abu Dhabi Bank, Dukhan Bank, and Burjeel Holdings in the last week of June alone .

London Remains the Preferred Listing Venue

London continued to be the favored international listing destination for GCC bond and sukuk issuers. Fortune reported on June 30, 2026, that a new $500 million sukuk was due to be listed on the International Securities Market of the London Stock Exchange on July 1 . GCC issuers consistently prefer London for its deep investor base, international regulatory framework, and established sukuk listing infrastructure.

Key Takeaways

H1 2026 was a period of stark contrasts for the GCC debt market. Total issuance grew, but through fewer, larger transactions led by sovereign and financial-sector borrowers. The market demonstrated significant resilience, absorbing a major geopolitical shock and returning to normalcy within two months of a ceasefire. The data clearly shows a structural shift: conventional USD bonds are the instrument of choice for new issuance, while sukuk — despite growth in Saudi domestic markets — lost share in the international segment. The region's deepening debt markets, now exceeding $1.2 trillion in total outstanding securities, continue to attract global investors, with London serving as the primary gateway.