Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Interest Rates

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 

MIDEAST DEBT-Gulf bonds likely to set new record in 2021 amid budget squeeze

11/26/2020 | 05:12am EST

DUBAI, Nov 26 (Reuters) - International debt sales from the six-member Gulf Cooperation Council are likely to notch another record year in 2021 as governments need to fill wider deficits and corporates look to grab money on the cheap amid low rates.

The oil-rich region saw a second consecutive year of record international bonds, topping $100 billion, as issuers' finances were battered by the COVID-19 pandemic along with low oil prices, with a few issues still possible before year-end.

"I think overall, the market will grow. We can easily add $7-10 billion more to 2020 total issuance," said Khalid Rashid, head of debt capital markets for the Middle East and North Africa at Deutsche Bank.

S&P Global Ratings said in July GCC government balance sheets are expected to continue to deteriorate up until 2023.

Kuwait, which has not issued dollar bonds since 2017, could return to the market next year, depending on a new debt law which would allow it to raise more funds overseas and help it overcome a liquidity crunch.

James Reeve, chief economist at Samba Financial Group, estimated Saudi Arabia's financing requirements at around $60 billion next year, of which around $18 billion would be covered via eurobonds.

More issuance is expected from Dubai, which in September returned to the public debt markets for the first time in six years. Bankers expect it to issue another $2 billion next year as key sectors of its economy continue to be squeezed.

For sub-investment grade Bahrain and Oman, issuing debt is vital to replenish dwindling foreign reserves, though Oman may need explicit support from Gulf neighbours as investors are increasingly concerned about its worsening credit trajectory.

Hasnain Malik, head of equity strategy at Tellimer, said he expects more consolidation among government-related enterprises, removing duplicated cost, and "raising of debt for the stronger business models that result from this consolidation is likely."

Among corporates, a new entry could be Abu Dhabi National Oil Company (ADNOC), which received a credit rating last year, a banker said. ADNOC did not respond to a request for comment. (Reporting by Yousef Saba; Editing by Davide Barbuscia, William Maclean)


© Reuters 2020
Latest news "Interest Rates"
12:45aUbs says low and persistently negative interest rates and expectations of continuing easy monetary policy will remain headwinds to net interest income, while supporting market sentinment
RE
12:37aChina's short-term money rates jump to pre-COVID levels on tighter cash conditions
RE
01/25Mexico's Antitrust Commission Fines Banks, Traders in Bond Probe
DJ
01/25ECB focuses on bank credit, bonds in gauging financing conditions - Lane
RE
01/25Oman electricity transmission company hires bank abc, first abu dhabi bank, jpmorgan, national bank of oman and standard chartered for usd bonds - document
RE
01/25Oman electricity transmission company hires banks for 7-yr or 10-yr bonds - document
RE
01/25Italian bond yields drop on talk of new government without election
RE
01/25Bank of England told to stop buying 'high carbon' bonds
RE
01/25ECB to invest own cash in BIS's green bond fund
RE
01/25Italian bond yields edge off highs, politics in focus
RE
Latest news "Interest Rates"