Moody’s: Middle East investment grade companies face $91 billion in refinancing needs
According to Moody’s Investors Service, Middle East investment grade companies face refinancing needs of about $91 billion from bank and bond debt due to mature over the next four years. This accounts for approximately eight per cent of total EMEA bank and debt maturities of $1.17 trillion.
Moody’s analyses the refinancing needs of its EMEA based investment grade (IG) issuers by examining their bond and bank loans maturities on an annual basis.
The report was titled EMEA Investment-Grade Non-Financial Companies: Continuing Disintermediation Should Not Challenge Refinancing Execution over the Next Four Years.
Among EMEA countries, companies in Germany, France and the United Kingdom account for the greatest amounts of bank and bond maturities (each at 15 per cent) in the next four years. While last year, Euro periphery companies appeared to face the greatest refinancing challenges, Moody’s expects refinancing concerns may shift to Russia, which now accounts for 10 per cent of total EMEA (11 per cent of European) bank and bond maturities in the same timeframe. Over two thirds (72 per cent) of total Russian debt is concentrated in the energy sector with Rosneft and Gazprom making up most of the Russian maturity wall in 2015. The remaining 28 per cent is shared among the Utility, Metals & Mining, Transportation Services, Telecoms and Chemicals industries.
Moody’s expects that the average investment grade corporate credit quality over the next four years will be stable to slightly improving, with liquidity remaining solid supported by the gradual macro-economic recovery. Despite the trillion debt figure, the rating agency believes that investment grade refinancing volumes in EMEA are manageable within the normal capacity of capital markets. Nevertheless, Moody’s highlights the increasing flight to debt capital markets versus bank lending, which leaves fewer alternatives if capital markets experience turmoil in the future.
Source: cpifinancial
