Jordan Raises $1bn New Eurobond As It Bags More Aid

Jordan has this week issued a $1bn Eurobond with a yield of 5.8% due in 2027. The bond, which was more than four times oversubscribed at $4.35bn, was managed by Citigroup and JP Morgan.

Finance Minister ‘Umar Malhas hailed Jordan’s success in issuing the international bond in one day and at a yield less than the year ago rate of 6.375%, and said that it reflects investors’ confidence in the kingdom’s economy and its reform programs. S&P has recently affirmed Jordan BB-/B rating, with outlook remaining negative.

But local economist Zayyan Zawani warned in a comment to The Jordan Times that the economy, which is growing by around 2-5-2.7%, “cannot absorb more debts.” He added that oversubscription to the issue was not due to the strength of the economy, but rather to the surplus of cash in international markets. Total public debt at the end of August topped JD25.625bn ($36.1bn), or 93.3% of GDP, up from JD24.877bn ($35.1bn), or 93.4% of GDP at the end of 2015. Debt levels are worryingly high (see p3). (CONTINUED - 688 WORDS)