MIDEAST DEBT-China virus may further subdue Gulf bond sales in 2020 - Reuters

MIDEAST DEBT-China virus may further subdue Gulf bond sales in 2020 - Reuters:

The uncertainty surrounding the new coronavirus outbreak has added to fund managers’ expectations that 2020 will see fewer hard currency bond issues from the Gulf compared to last year.

Governments and corporates in the Gulf have increasingly turned to the debt markets in recent years to replenish coffers depleted by lower oil prices while taking advantage of global low rates.

Last year the Gulf supplied a record $87.6 billion in international bonds, according to Refinitiv data, eclipsing the $71.8 billion in 2018 and topping 2017’s record $84 billion.

But a rise in regional bond spreads since the beginning of the year suggests the impact of China’s coronavirus outbreak on global economic growth may translate into higher funding costs for Middle East debt issuers, potentially curbing new borrowing.