By Shane McGinley
Remains unclear how $15bn of debt will be financed, Arab turmoil unlikely to impact economic growth
Egypt and the six Gulf states have $80bn of debt maturing in the next two years, a senior executive of Royal Bank of Scotland said Tuesday in Dubai.
“It’s not clear how the financing will be approached,” for $15bn of the debt but it represents a good opportunity for RBS, said Jacco Keijzer, head of the lender’s debt capital markets business in the Middle East
“There are some good high quality good names in there, where if we sit down with them some of the refinancing can be executed,” he said.
An estimated $25bn of the debt, which extends across the bank loan and bond markets, has been refinanced, including $9bn of debt belonging to state-backed conglomerate Dubai World.
A further $30bn belongs to companies that have “no problem” in meeting their debt obligations, Keijzer said.
Regional instability knocked $140bn off the Arab world’s sixteen largest bourses in the five weeks to March 4, as investors fled the markets.
Despite this, Keijzer said the unrest would have little impact on the region’s economic growth.
“I don’t think the political unrest is going to derail the economic recovery of the region overall. A lot of the restructuring was already done in 2010… People continue to be very comfortable with the region overall,” he said.
Tom Emmett, RBS’ head of equity capital markets for the Middle East and Africa said the real barometers for the region would be Libya and Egypt’s post-revolution performance.
“There is definitely a feeling that the underlying environment for issuance of equity and equity linked was going to improve and that still holds true,” he said.