Algeria, which hasn’t sold debt abroad in over two decades, signaled it may reverse its aversion to outside borrowing and lift some restrictions on foreign investment, Bloomberg News reported. The protest-torn OPEC member, still led by veterans of the war for independence from France waged over half a century ago, was forced to restructure billions of dollars worth of loans from foreign banks in the 1990s. While struggling to revive the economy, the government has been wary of turning to outside financing for fear it could again leave the nation beholden to others.
North Africa/Middle East
Arabtec Holding PJSC shares soared in Dubai after the company started talks to merge with Abu Dhabi-based Trojan Holding LLC, Bloomberg News reported. The stock advanced as much as 13%, the steepest intraday gain since July 2017, as Arabtec said the entities began a study to potentially combine their construction businesses and may merge after technical, financial and legal reviews. It didn’t provide further details. The talks come as a property-market slowdown weighs on companies in the United Arab Emirates.
Qatar’s banks eased repayment terms on real-estate loans, according to the chief executive officer of Doha Bank QSC, after the Saudi Arabia-led standoff hurt property prices, Bloomberg News reported. “Cash flows have been redefined, debt has been restructured to see that debt-servicing capacity is not in danger in the coming days for real estate owners,” Raghavan Seetharaman said in an interview with Bloomberg TV on Monday.
Aabar Investment’s bonds, worth 2 billion euros ($2.2 billion), have lost about a quarter of their value this week after an auditor of the Abu Dhabi company gave an “adverse opinion” on its 2018 financial statements, Reuters reported. Aabar was a subsidiary of International Petroleum Investment Co (IPIC), which is now part of Abu Dhabi state fund Mubadala Investment Co.
Lebanon’s central bank has secured up to $1.4 billion in five-year deposits from private investors overseas, boosting dollar reserves in one of the world’s most-indebted countries and easing concerns that it could struggle to repay its debts and defend its currency, Bloomberg News reported. Governor Riad Salameh said in an interview with Bloomberg TV in Beirut that Banque du Liban remains committed to preserving the Lebanese pound’s peg of about 1,507.5 to the dollar, in place for more than two decades, and has “ample” cash to do so.
Creditors of Abu Dhabi-based Gulf Marine Services (GMS) are close to hiring an adviser to help them renegotiate debt terms, two sources familiar with the matter said, Reuters reported. London-listed GMS, which provides support vessels for offshore oil and gas and other energy installations, has been hurt by a downturn in the oil and gas services industry after a slump in oil prices in recent years reduced demand.
Lebanese Parliament Speaker Nabih Berri said he had a “positive” feeling over a sovereign credit rating report expected later this week, although he had no information about it, Lebanese newspaper al-Joumhouria reported on Wednesday, Reuters reported. Lebanon, saddled with one of the world’s heaviest public debt burdens and blighted by years of low economic growth, is seeking to put its public finances on a sustainable path by implementing long-delayed economic reforms. However, markets have been pricing in the risk of a sovereign credit rating downgrade in recent days.
Dollar-denominated bonds issued by Lebanon’s government dropped to new lows on Tuesday on worries about the risk of a sovereign credit rating downgrade by S&P Global, Reuters reported. The 2027 issue slumped by 2 cents in the dollar to trade at its lowest level, while the 2026 issue shed 2.4 cents to also reach a new low, according to Tradeweb data. “There’s an upcoming rating review by S&P and people are focusing on the possibility of a downgrade,” said Giyas Gokkent, of JPMorgan Securities.
Lebanon’s sovereign ranking will probably be cut deeper into junk by S&P Global Ratings within days, putting its bonds into a category considered vulnerable to nonpayment as the country struggles to claw back enough foreign currency, according to Goldman Sachs Group Inc, Bloomberg News reported. One of the world’s most indebted nations is on negative outlook at S&P, which is due to publish a review on Friday and currently rates Lebanon B-, six steps below investment grade and one notch higher than Moody’s Investors Service.
Billionaire Mukesh Ambani’s Reliance Industries Ltd. is on a mission to reduce debt after racking up $76 billion in capital expenditure in the last five years, Bloomberg News reported. The conglomerate aims to be a zero-net-debt company in 18 months, Asia’s richest man told shareholders Monday. Aiding that effort would be a decision to sell 20% of Reliance’s oil-to-chemicals business to Saudi Arabian Oil Co., or Aramco, at an enterprise value of $75 billion. The company will also start preparing to list its retail and telecommunications units within five years, Ambani said.