MENA Sovereign Borrowing To Decline By 20%To $136 Billion, Report Says

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DUBAI (S&P Global Ratings): Middle East and Northern African (MENA) sovereign borrowing will slow down in 2017, after increasing sharply in 2016. This is according to a report titled “Sovereign Debt 2017: MENA Borrowing Is Expected To Decline By 20% To $136 Billion,” and published today on RatingsDirect.

“We project that the 13 MENA sovereigns we rate will borrow an equivalent of $136 billion from long-term commercial sources in 2017. This represents a 20% decline (of $34 billion) in long-term commercial debt issuance,” S&P Global Ratings credit analyst Trevor Cullinan said.

In 2017, $28 billion (about 20%) of MENA sovereigns’ gross borrowing will be used to refinance maturing long-term debt, compared with $24 billion in 2016, resulting in an estimated net borrowing requirement of $108 billion.

As a consequence, we project that MENA sovereigns’ commercial debt stock will reach $720 billion by end-2017, a 19% increase from 2016. Adding bi- and multilateral debt, the total stock will reach $821 billion, a year-on-year increase of $135 billion, or 20%. The share of noncommercial official debt (bi- and multilateral) in total sovereign debt is set to rise to 14% of total debt as of year-end 2017, from 13% in 2016. We expect that outstanding short-term commercial debt (debt with an original maturity of less than one year) will reach $106 billion at year-end 2017.