Persian Gulf Bankers See Fee Squeeze on Bond Sales

Banks in the Persian Gulf are settling for lower fees as competition for bond sales intensifies.
Bond transactions in the six-member Gulf Cooperation Council are recovering after concerns Dubai World, the state- owned holding company, would default on $24.9 billion in debt raised loan costs for businesses, deterring borrowing. Banks led by HSBC Holdings Plc and Standard Chartered Plc advised on $9.4 billion of Gulf bond sales in the third quarter, the most since the last three months of 2009, according to data compiled by Bloomberg.
The fees for bond sales in emerging markets can often be lower than those in the U.S. The weighted average of disclosed fees banks charge for emerging market bond mandates is 28 basis points this year, compared with 37 basis points in the U.S.