File - A sign on the Citigroup office tower is seen in this 11 April, 2007 in New York. AFP PHOTO/DON EMMERT
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A revival of international bond issues from the Gulf is set to draw heavy demand from local and foreign investors, despite the latest geopolitical upheavals in the Middle East and the approach of higher U.S. interest rates.That means next month's bond issuers will be able to demand favorable terms as investors focus on the GCC's economic strengths, including big current account and budget surpluses that set it apart from many other emerging markets.One is that issuers are looking ahead to higher U.S. interest rates as soon as next year, which would work through the Gulf's currency pegs to boost local loan rates.Some issuers want to maintain or establish presences in the bond market now, so that they have another option when the loan market eventually starts to tighten.More than geopolitics, the biggest threat to the Gulf's primary bond market may be expectations for U.S. interest rates.
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