Gulf governments expected to raise $390bn in funding by 2020

Governments in the six-nation Gulf Cooperation Council are turning to public markets to raise funds.
Gulf governments expected to raise $390bn in funding by 2020
By Yasmin Al Heialy
Sun 08 May 2016 02:45 PM

Governments in the Gulf are expected to raise between $255bn to $390bn by 2020 by selling both international and local debt as pressure grows on public finances due to the low oil price.

The GCC countries are expected to post a total fiscal deficit of $318 billion between 2015 and 2016, according to the GCC Sovereign Debt 2016 Report.

Despite spending cuts announced across the GCC, Qatar expects to post a deficit of $13 billion this year, its first budget deficit in 15 years, while Saudi Arabia reached a deficit of $99 billion in 2015, with an estimate of $88 billion for 2016.

Qatar will seek to raise up to $5 billion from a planned bond sale as early as this month, its first since 2011, Bloomberg reported.

Qatar carries the third-highest investment grade rating from Standard & Poor's.

HSBC Holdings Plc, Deutsche Bank AG, Barclays Plc, Bank of America Corp. and Bank of Tokyo Mitsubishi UFJ are among lenders that will help arrange the sale.

The yield on the Qatar government's 2022 bond climbed the most in 10 days, rising 2 basis points to 2.498 percent on Wednesday in Doha. The yield on its 2030 security was up 1 basis point.

Meanwhile, Abu Dhabi expects to post a wider budget deficit of $10.1 billion in 2016 because of low oil prices, and plans to cover the gap mainly with international bond issues, a prospectus for a bond sale by the emirate showed.

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