Project bonds to boost GCC infrastructure financing
Dubai, November 11, 2013
There are signs that the use of bond financing could be about to take off in the project finance capital markets of Gulf countries, according to a Credit FAQ report by Standard & Poor's ratings services.
"Overall, we see a number of factors pushing the development of project finance capital markets in GCC countries, including high infrastructure spending needs; growing populations; a period of relatively low investment yields; and robust sovereign creditworthiness," said S&P in its report titled "How Project Bonds Could Plug The Gap In GCC Infrastructure Financing."
These factors are matched by a variety of funding models that over time should spawn more project capital market issuance, it stated.
The S&P report pointed out that the recent Ruwais Power Company (Shuweihat 2) project transaction, which includes $825 million of bond issuance, was a perfect example of how bank loans and bonds could be used together in co-financed projects.
"We consider that project financing (both bank and bond) will be increasingly used in the region. However, we believe it is too early to tell whether we have reached a tipping point in project finance capital market activity," observed S&P's credit analyst Karim Nassif.
"The availability and tenor of funding by major local and regional banks, along with the pricing of bank loans relative to bonds, will be key measures in determining the progress of project finance capital markets in GCC countries over time," he added.-TradeArabia News Service
More Finance & Capital Market Stories
- Saudi inflation plunges to four-year low
- UAE investment appetite 'strengthens' says expert
- Dubai mulls rule change to woo domiciled funds
- UAE, Abu Dhabi roll over $20bn of Dubai's debt
- Saudi can achieve 4.4pc growth this year
- Emaar listing of retail unit 'within months'
- Dubai Investments nets $29m profits
- Compliance officers facing diverse pressures, says study
- Abu Dhabi finance dept inks deal with Ajman
- Kuwait registers 8pc credit growth
- Bahrain Sico funds net solid returns
- Emaar proposes 15pc cash dividends
- ABG units win top Islamic finance award
- Finance House approves 25pc cash dividends
- Qatar 'most expensive country in Gulf'
- Egypt regulator sets rules for index
- Dubai Islamic eyes Kenya, Indonesia for expansion
- ADCB to buy back 3pc of its shares
- GCC insurance growth outpaces developed markets
- Bahrain 'faces budget deficit, inflation challenges'
- Global Payment Services wins key certification
- BBK unveils big India expansion plans
- Kuwait GDP growth to hit 3.5pc in 2014
- Gulf shares tumble over EM exposure cut
- GCC bonds to gain from macro-economic climate
- French Business Council Dubai members up 18pc
- Egypt economy growth seen less strong than thought
- Sharjah approves $4.2bn budget for 2014
- Saudi non-oil sector posts solid growth in Feb
- Seera total income rises to $34m