Oman will meet its funding needs of $50 billion between 2020 and 2023 raising 63 percent of it through external debt issuance, according to S&P Global Ratings.
The rating agency said on Monday it expected Oman to raise the remaining 18.5 percent from drawdowns of domestic and external liquid assets, 15 percent from domestic debt and 3 percent through other transactions.
Rated sub-investment grade or “junk” by all three major ratings agencies, Oman has built up debt in recent years to offset the impact of falling crude revenues as well as the coronavirus pandemic. The country has kept away from the international debt so far in 2020 as its 10 and 30-year bonds have weakened and offer a yield of more than 9 percent.
Read more: Oman to cut government budgets by at least 10 pct amid coronavirus, low oil price
"If Oman were to consider the pricing of funding in international capital markets prohibitive, or foreign investors were unwilling to roll over maturing debt, the country's depletion of external assets would accelerate and confidence in the Omani rial's peg to the US dollar could diminish,” S&P said.
“Our ratings on Oman are supported by our expectation that support from GCC countries would be forthcoming if the country were to experience significant external liquidity pressures, particularly those that could threaten the peg.”
In its forecasts, S&P assumes an average Brent oil price of $30 per barrel during the rest of 2020, $50 per barrel in 2021, and $55 per barrel from 2022, relative to $64 per barrel in 2019.
Coronavirus: Oman urges firms to ask expat workers to ‘leave permanently’
Coronavirus: Oman to reopen commercial activities including repair shops, exchanges
Coronavirus: Oman records 174 new cases, bringing total to 3,573Oman recorded 174 new confirmed cases of coronavirus on Monday, bringing the total number in the country to 3,573, according to the Ministry of Health ... Coronavirus
Oman reports 112 new coronavirus casesOman has reported 112 new coronavirus cases on Saturday, bringing the total to 3,224 confirmed cases in the country, the Ministry of Health ... Middle East
Coronavirus: Oman confirms 175 new cases, raising total to 3,399Oman's health ministry confirmed 175 new coronavirus cases over the past 24 hours, raising the total to 3,399 in the Sultanate on Sunday.Read the ... Coronavirus