The chief executive of oil giant Saudi Aramco said on Tuesday that bankers had not expressed any concerns about a recent rise in Saudi funding costs ahead of the company’s potential acquisition of a stake in petrochemical firm Saudi Basic Industries Corp (SABIC), Reuters reported. The cost of insuring against a Saudi sovereign default over the next five years touched 100 basis points last week for the first time since June, in a sign of how deeply the killing of journalist Jamal Khashoggi has damaged sentiment toward the kingdom.
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Saudi Arabia’s international bonds are underperforming lower-rated emerging market sovereigns, in a sign of how deeply the killing of journalist Jamal Khashoggi has damaged sentiment toward the kingdom, Reuters reported. Rated A1 by Moody’s, A- by S&P and A+ by Fitch, Saudi Arabia has sold $52 billion in U.S. dollar-denominated bonds since its first international issue in 2016, becoming one of the biggest debt issuers in emerging markets.
In January, the Abraaj Group had $14 billion of assets under management and was trying to raise $6 billion for what would be the world’s largest emerging-markets private-equity fund. It’s now the world’s largest insolvent private-equity firm. In June, it filed for provisional liquidation. During its rise, the Dubai-based firm attracted many Western investors. Its founder, Arif Naqvi, promised to make money by doing good in poorer countries, including with a fund that would invest in hospitals serving African and Asian cities, The Wall Street Journal reported.
Egypt is considering issuing bonds in currencies other than the euro and the U.S. dollar after launching a roadshow in Asia, Finance Minister Mohamed Maait told Reuters on Saturday, as the government steps up efforts to improve its debt structure, The New York Times reported on a Reuters story.
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Etihad Airways and Abu Dhabi's Department of Finance are likely to reject calls for a meeting with disgruntled bond investors in the belief that their complaints have no legal merit, sources close to the matter told Reuters. In 2015 and 2016 Etihad issued $1.2 billion in bonds in a partnership with airlines it partly owned at the time, including Alitalia and Air Berlin, the International New York Times reported on a Reuters story. The bonds are now in default because the European airlines, which are now insolvent, have not honoured their part of the obligations.
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Bahrain said Thursday that Kuwait, Saudi Arabia and the United Arab Emirates pledged $10 billion to support the island kingdom, helping it avoid defaulting on loans as it tries to restructure its finances, the International New York Times reported on an Associated Press story. Bahrain, though the first Arab nation in the Persian Gulf to strike oil, had faced the specter of defaulting on a $750 million Islamic bond repayment due on Nov. 22.
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A group of creditors to entities set up to finance affiliates of Etihad Airways said in a letter to the airline they were misled on its commitments to support part-owned carriers, two of which are now insolvent, a person familiar with the matter said. The investors say they bought bonds issued by EA Partners between 2015 and 2016 after Etihad implied it would back the affiliates including struggling carriers Alitalia and Air Berlin, according to the person, who asked not to be identified because it’s private, Bloomberg News reported.
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The World Bank halved Lebanon’s 2018 growth forecast to 1 percent, predicting its ratio of debt to gross domestic product would remain on an “unsustainable path,” Bloomberg News reported. The international lender cited a central bank decision to abruptly halt subsidized housing loans as a main factor behind the slowdown in economic activity this year. The real estate sector has provided “a rare source of growth impetus since 2012,” while production in most of the country’s other industries has fallen off, the World Bank said in its October report.
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Lebanon’s finances have long resembled something out of Alice in Wonderland. Some investors are now wondering whether the house of cards is about to come crashing down in a messy sovereign default, the Financial Times reported. The backdrop is stark. The Mediterranean country’s government debt is equal to an eye-watering 153 per cent of its gross domestic product, the third-worst figure in the world after Japan and Greece.
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Bahrain’s credit risk declined to the lowest level in five months on optimism the nation’s neighbors will soon come to the island-state’s rescue with an aid package, Bloomberg News reported. The cost of insuring Bahrain’s debt against default fell 34 basis points last week on relief that Saudi Arabia, the United Arab Emirates and Kuwait were said to be considering a $10 billion plan. The contracts closed at 307 basis points on Friday, the lowest since May and about half the level in June, when concern over the country’s finances spurred a sell-off of Bahraini assets.
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