Oct. 31 (Bloomberg) -- Delays by companies in the Gulf Cooperation Council to tap capital markets may exaggerate refinancing risks, Standard & Poor’s Ratings Services said.
“Higher rated issuers will have no problem rolling over debt, but those farther down the rating scale may find it more difficult to do so,” S&P said in an e-mailed report today. “Overreliance on short-term bank debt also exposes issuers to refinancing risks down the line.”
Global economic conditions for issuing bonds showed signs of recovery this month after a turbulent August, S&P said. Increased risk aversion by investors and concern about the negative implications of slowing global economic growth were behind the swings, according to the report.
Companies in the six-member GCC are recovering after the worst global recession since the 1930s curbed lending and bond issuances and forced a decline in the regional property market. The United Arab Emirates will dominate sovereign-bond offerings among GCC members this year as government sales in the region total $5 billion, Standard Chartered Plc said in March.
Government-related entities in the region and companies that bear “significant refinancing risks in 2012” have seen mostly negative outlooks, S&P said today.
There is a “return to stability” in the GCC property markets, it added.
--Editors: Tim Farrand, Susan Lerner
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