Bond Prospectus Highlights Oman's Frail Finances

摘要

The selection of a new leader,possible conflicts among its neighbors and a distancing from the US are likely risk factors to Oman's economic stability,prompting a tightening of liquidity,a widening of its budget deficit and squeezing balance of payments and foreign currency reserves,according to the prospectus for its latest sovereign bond issue.Earlier this month,the sultanate sold $3 billion of notes-modest compared with other recent offerings in the region-that it said will be deployed for general budgetary purposes.Hydrocarbons accounted for 80.5% of the sultanate's revenues in 2018.Oman is the largest non-Opec crude oil producer in the Middle East other than Qatar,with crude oil and condensates output of 981,000 barrels per day for the year ended Dec.31,2018 as compared to 970,400 b/d for 2017.Such a heavy reliance on oil and gas meant it was starkly impacted by the most recent downturn.This was underlined when Oman's sovereign credit rating was slashed to junk status by Moody's last year.It is slowly clawing its way back to economic health,however(EIF Nov.28'18).Oman's deficit in the first five months of this year amounted to 358.4 million Omani rials($931 million),a 67% reduction from the previous year,and the smallest fiscal shortfall for the country since 2014.