The Name’s Bonds, GCC Government Bonds

With oil prices languishing at around $30/B and bank liquidity drying up, more Gulf borrowers are expected to tap the bond market this year. But low oil prices will constrain the amount of funding available to Gulf sovereigns and banks to support the region’s infrastructure bill, ratings agency S&P says in a report issued this week. S&P suggests that GCC governments should turn to “more financially innovative solutions” like public private partnerships to fund their projects.

Oman, one of the more financially vulnerable GGC states, is planning to issue $5-10bn in international Eurobonds to cover its budget deficit, according to central bank chief Hamud Sangur al-Zadjali. Muscat plans to issue OR600mn worth of domestic bonds in 2016, at the rate of OR100mn every two months, he adds.


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