Mena sovereign borrowing to decline by 6% to $181bn - The Peninsula Qatar

Mena sovereign borrowing to decline by 6% to $181bn - The Peninsula Qatar:

"S&P Global believes sovereign borrowing in the Middle East and North Africa could decrease by 6 percent this year after falling 30 percent in 2017. This is chiefly because fiscal consolidation measures in all Gulf Cooperation Council (GCC) countries and higher oil prices will likely reduce GCC sovereigns’ funding needs, the ratings agency noted in its latest report. S&P expects that about 40 percent of Mena sovereigns’ $181m of gross borrowing this year will go toward refinancing maturing long-term debt, resulting in an estimated net borrowing requirement of $108bn. Adding amounts owed to bi- and multilateral institutions, total debt will reach about $860bn, a year-on-year increase of $13bn, or 2 percent. However, the share of non-commercial official debt is set to decline to 11 percent of total sovereign debt as of year-end 2018, from 12 percent in 2017. It expects that outstanding short-term commercial debt (original tenor of less than one year) will fall to $131bn by the end of this year. “For 2018, we project that sovereigns’ commercial debt rated in the ‘AA’ category (Abu Dhabi, Kuwait, and Qatar) will be 19 percent of the total, up from 16 percent in our 2017 report. The share of ‘A’ category debt (Ras Al Khaimah and Saudi Arabia) will rise to about 20 percent. No Mena sovereigns are rated ‘AAA’. Due to the rise in the share of debt issuance by higher-rated Mena sovereigns, the share of commercial debt rated in the ‘BBB’ category or lower should fall to about 62 percent of the total from 67 percent at the time of our 2017 report. Egypt accounts for 19 percent of the total commercial debt we expect the region’s sovereigns will issue by the end of 2018, with Lebanon at about 11 percent, closely followed by Iraq at around 10 percent,” the ratings agency noted."



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