Two of the Gulf non-investment grade sovereigns are lining up new bonds even as crude prices inched up to $72/barrel. Oman rated Ba3/B+/BB- (Moody’s/S&P/Fitch) is planning its second debt sale in the year and has commenced talks with banks for a possible dollar Sukuk, according to Bloomberg. Oman’s finances are amongst the weakest in the Gulf Arab nations and the state has been trying to bolster its finances under the new Sultan. The fiscal deficit of the nation will be ~$9bn in 2021-22 according to Fitch Ratings and the country has debt maturities of $10bn coming up in the FY. The nation had raised $3.25bn via a three trancher in January this year. This was followed by a $2.2bn 15-month loan through banks and another $1.56bn loan from its sovereign wealth fund.
Oman’s 4.875% 2025s and 6.5% 2047s were up 0.12 and 0.06 respectively to trade at 105 and 97.04.

Meanwhile Bahrain rated B2/B+/B+ has also engaged with banks for the sale of international debt in the second half of the year according to Zawya. The sovereign had last tapped the offshore bond markets in January when it raised $2bnMoody’s had lowered the country’s outlook to negative on April 29 this year based on “a larger than earlier expected weakening in fiscal metrics and ongoing uncertainty around the timing and the size of the augmentation of the financial support package for Bahrain from the fellow Gulf Cooperation Council (GCC) sovereigns.” S&P had followed suit on May 28 and lowered the outlook to negative from stable based on increasing risks to the government’s ability to service external debt. The rating agency had said, “Relatively high oil prices should support the fiscal position this year, but deficits will nevertheless remain elevated, adding to already-high debt and debt-servicing burdens.”

Bahrain’s 6.125% 2023s and 7.5% 2047s were up 0.11 each to trade at 108.25 and 105.97 on the secondary markets.
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