$42 billion in debt instruments due in the Gulf region in 2023

The total dues of debt instruments on Saudi entities, which are due to be paid this year, amounted to about $10.2 billion.

The financial resources of companies through their cash flows, refinancing through borrowing again, or redeeming the value of bonds early are among the most prominent repayment options.

While the Gulf region is expected to pay more than $42 billion to investors this year for issuing debt instruments over the past years, what is remarkable is that 66% of the bonds and sukuk, which come due, belong to Gulf companies.

The total bonds and sukuk on Saudi entities that are due to be repaid between 2023 and 2032 – that is, nine years – amount to $ 114.1 billion, the majority of which were issued at low interest, according to Al-Eqtisadiah newspaper.

And those sukuk and bonds are debt instruments that were issued five or ten years ago, and then the issuer returns the full investment amounts to investors when the payment date comes at the end of the maturity date.

The monitoring was based on data issued by the Fixed Income Department of First Abu Dhabi Bank, which included debt instruments issued in hard currencies such as the dollar, the euro, the yen and the pound sterling.

On the other hand, the Reed platform quoted its sources as saying that one of the major Saudi companies listed in the local market plans to offer two dollars in bonds in the second quarter, before the maturity date of its old bonds, worth one billion dollars, next October.

Bond indices showed that the additional cost of refinancing Gulf debt instruments ranged between 84 and 126 basis points by the end of 2022, and this cost is lower compared to the average refinancing cost of 318 basis points for fixed income instruments for emerging markets.

And Fitch Agency had suggested, in a report issued in January 2023, that the Gulf authorities would implement the largest refinancing of maturities this year, since 2018.