DUBAI, Nov 26 (Reuters) - International debt sales from the
six-member Gulf Cooperation Council are likely to notch another
record year in 2021 as governments need to fill wider deficits
and corporates look to grab money on the cheap amid low rates.
The oil-rich region saw a second consecutive year of record
international bonds, topping $100 billion, as issuers' finances
were battered by the COVID-19 pandemic along with low oil
prices, with a few issues still possible before year-end.
"I think overall, the market will grow. We can easily add
$7-10 billion more to 2020 total issuance," said Khalid Rashid,
head of debt capital markets for the Middle East and North
Africa at Deutsche Bank.
S&P Global Ratings said in July GCC government balance
sheets are expected to continue to deteriorate up until 2023.
Kuwait, which has not issued dollar bonds since 2017, could
return to the market next year, depending on a new debt law
which would allow it to raise more funds overseas and help it
overcome a liquidity crunch.
James Reeve, chief economist at Samba Financial Group,
estimated Saudi Arabia's financing requirements at around $60
billion next year, of which around $18 billion would be covered
More issuance is expected from Dubai, which in September
returned to the public debt markets for the first time in six
years. Bankers expect it to issue another $2 billion next year
as key sectors of its economy continue to be squeezed.
For sub-investment grade Bahrain and Oman, issuing debt is
vital to replenish dwindling foreign reserves, though Oman may
need explicit support from Gulf neighbours as investors are
increasingly concerned about its worsening credit trajectory.
Hasnain Malik, head of equity strategy at Tellimer, said he
expects more consolidation among government-related enterprises,
removing duplicated cost, and "raising of debt for the stronger
business models that result from this consolidation is likely."
Among corporates, a new entry could be Abu Dhabi National
Oil Company (ADNOC), which received a credit rating last year, a
banker said. ADNOC did not respond to a request for comment.
(Reporting by Yousef Saba;
Editing by Davide Barbuscia, William Maclean)