DUBAI: Oman is discussing a mortgage of no less than $1 billion with a bunch of banks, sources stated, because the oil-producing Gulf state seeks extra funding forward of heavy debt redemptions over the subsequent two years.
Rated under funding grade by all main credit score businesses, Oman issued $2 billion in bonds final month in a deal which noticed lacklustre demand partly due to investor issues over the nation’s worsening credit score trajectory.
It’s now in talks with banks for a mortgage that may refinance $1 billion of current financial institution debt due in January, stated one of many three sources acquainted with the matter. A second supply stated the brand new facility may exceed $1 billion.
Oman’s ministry of finance didn’t instantly reply to a request for remark.
Oman has $1.5 billion in worldwide bonds due in June, along with the $1 billion mortgage due in January, which it took out in 2016 after oil costs plummeted, Refinitiv information confirmed.
S&P International Scores, which downgraded Oman final month, stated exterior debt maturing within the subsequent two years got here to $10.7 billion, or about 7.5% of gross home product (GDP).
“Oman will proceed to depend on exterior debt to fund its giant authorities deficits and maturing debt and stay weak to shifts in investor sentiment,” the scores company stated final month.
The oil producer has piled up debt at breakneck velocity prior to now few years, after oil costs crashed from greater than $115 a barrel in June 2014 to below $30 in January 2016.
On the similar time, Oman’s plans to diversify its financial system and introduce delicate tax and subsidies reform dragged below Sultan Qaboos, who died in January after half a century in energy.
A fiscal reform plan below Sultan Haitham, Oman’s new ruler, goals to convey the fiscal deficit all the way down to 1.7% of GDP by 2024, from a preliminary deficit of 15.8% this yr.
As a part of deliberate reforms, Oman will introduce a 5% value-added tax subsequent yr and can be trying to implement an revenue tax on excessive earners in 2022, a primary for the Gulf Cooperation Council states.
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