Saudi, British FMs discuss regional developments in phone call    Saudi Arabia unveils new skill-based system for expatriate work permits Classification for existing workers began on June 18 while July 1 set for newcomers    New Saudi embassy building inaugurated in Moscow    Nearly 17 million foreign pilgrims perform Umrah in 2024, up 101% from 2022 Makkah ranks 5th globally in number of international visitors    Saudi Arabia reaffirms dedication to achieving equitable and sustainable digital development    Over 80,000 commercial registrations issued in 2Q 2025, bringing total to 1.7 million    Elon Musk announces launch of new political party amid fallout with Trump    UK Foreign Secretary makes historic visit to Syria    Khamenei makes first public appearance since Iran–Israel war    Desperate search continues as Texas flood kills 51, including 15 children 27 girls from summer camp still missing    Riot Games responds to match-fixing allegations in VALORANT    BLAST responds to BESTIA Visa controversy ahead of CS2 Austin major    Christophe Galtier named NEOM SC head coach ahead of historic Saudi Pro League debut    Level Up Docuseries launches June 6 on Prime Video    OPEC+ further accelerates oil output hike by 548,000 bpd in August    Saudi Arabia tops global ICT Development Index for 2025    Michael Madsen, actor of 'Kill Bill' and 'Reservoir Dogs' fame, dead at 67    BTS are back: K-pop band confirm new album and tour    Michelin Guide launches in Saudi Arabia with phased rollout in 2025    'How fragile we are': Roskilde Festival tragedy remembered 25 years on    Sholay: Bollywood epic roars back to big screen after 50 years with new ending    Ministry launches online booking for slaughterhouses on eve of Eid Al-Adha    Shah Rukh Khan makes Met Gala debut in Sabyasachi    Pakistani star's Bollywood return excites fans and riles far right    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Soaring debt maturities in Gulf pose refinancing risks
Published in The Saudi Gazette on 20 - 11 - 2011

The Gulf Cooperation Council (GCC) region faces rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012-2014, Standard & Poor's Ratings Services said in a report.
Industry experts estimate bonds and sukuk of about $25 billion will mature in 2012, rising to about $35 billion in 2014. Standard & Poor's believes the region is therefore 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 in the region.
The ratings service said it believes 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 risks in the region.
“We anticipate that Gulf sovereigns will continue to benefit from high oil prices and increases in hydrocarbon production, which are bolstering government finances and external accounts,” S&P said in a statement.
“We expect that economic activity in 2011 will record its highest growth rate since the onset of the global financial crisis, supported by accelerated government spending and large-scale infrastructure investment,” it said.
“Yet, in spite of generally solid headline figures, public finances in the region have deteriorated structurally. Partly in response to the Arab Spring, many governments in the region have increased spending on social transfers, wages, housing, and infrastructure,” it added.
It said dependence on hydrocarbon revenues to finance such spending has increased, which is reflected in higher non-oil budget deficits and increased break-even oil prices.
“With the global economy weakening in 2012, we think the main channel of impact for the GCC will be through weaker demand for hydrocarbons and hence lower oil prices,” S&P said.
For Gulf banks, the report said they will generally not need to increase their capitalization because their current capital levels are already significantly higher than the new Basel III requirements and the composition of bank capital in the GCC is generally of high quality.
Among our recently revised Banking Industry Country Risk Assessments (BICRAs), Saudi Arabia is the strongest belonging in group 2. Oman, Qatar, and Kuwait (group 4); UAE, group 5 and;Bahrain's banking system in group 6, which is the highest risk among the GCC countries.
Under BICRA criteria, group ‘1' has the lowest risk, and group ‘10' the highest.
The Gulf insurance sector is stable which reflects the companies' generally strong capital adequacy, strong asset liquidity, and strong technical earnings. Although all of the GCC insurance markets are very competitive, the report said the majority of primary insurers maintain favorable underwriting margins.
“Among Gulf corporates, several companies have delayed issuances, which we believe could accentuate refinancing risks for these players,” it said. “Of all the Gulf corporates that S&P's rates, only one (International Petroleum Investment Company) has tapped the capital markets over the past six months.


Clic here to read the story from its source.