Bahrain is expected to issue $2-3 billion of international bonds, including sukuk, in 2025, Moody’s Investors Service said yesterday.
This follows a $1bn sukuk issued by state-owned Bapco Energies earlier this month.
However, the credit rating agency warned that a sharp tightening of global liquidity conditions and a significant drop in oil prices could create challenges for the kingdom to issue debt.
“A similar situation could arise to that of March 2020, when the government struggled to refinance its maturing eurobond as oil prices plummeted during the COVID-19 pandemic,” said Alexander Perjessy, vice-president, senior credit officer at Moody’s.
Moody’s estimates that Bahrain’s government external borrowing reached $5.5bn in 2023 and $3.6bn in 2024.
The kingdom has $2.4bn of external bonds and sukuk maturing in 2025, compared to $2bn in 2024.
S&P Global Ratings expects sovereign issuance volume by Bahrain to be between $2bn and $2.5bn in 2025, which could further widen the country’s debt-to-GDP burden to above 135 per cent.
“Bahrain could reduce its issuance if it receives more support from other Gulf Cooperation Council states or if oil prices rise significantly,” said Dr Mohamed Damak, managing director, sector lead financial institutions, MEA at S&P Global Ratings.
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