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Subject
Outlook for Omani debt.
Significance
Over the last two years, all three major credit rating agencies have cut Oman’s sovereign debt rating to junk status (meaning a rating below BBB-), most recently Moody’s on March 5. This has happened despite strengthening oil prices and positive internal developments, because of a growing debt load, resistance to fiscal reform and governance concerns.
Impacts
Funds forced to sell Omani bonds, due to their junk status, will buy BBB-rated sovereigns.
A pause in Omani bond issuance could raise market demand for similarly rated sovereign issues in the region, such as Bahrain.
Negatively rated oil-exporting sovereigns may speed up fiscal reforms to avoid Oman’s fate.
Keywords:
Oman,
ME/NAF,
Saudi Arabia,
United Nations,
economy,
bonds,
debt,
fiscal,
reform,
foreign investment,
foreign policy,
foreign trade,
oil,
public sector,
regional
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2019
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