gulfnews : Gulf faces rising refinancing risks over next three years

A combination of factors such as rising debt maturities, high volatility in global markets and the absence of European banks from the loan syndication market is expected to increase the refinancing risk in the Gulf region, according to rating agency Standard & Poor's and independent analysts.

Standard & Poor's Ratings Services said yesterday that issuers in the Gulf Cooperation Council (GCC) countries face rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012 and 2014.

Industry experts estimate bonds and sukuk of about $25 billion (Dh91.95 billion) will mature in 2012, rising to about $35 billion in 2014. "We believe the region is entering a challenging loan and bond refinancing cycle, especially given the ongoing volatility in capital markets and fears that slowing global economic growth is already curbing corporate debt issuance and heightening refinancing risk," said Stuart Anderson, Managing Director and Regional Head, S&P Middle East.

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