Muscat: Moody's Investors Service has assigned a definitive Baa1 rating to the Government of Oman's US dollar bond issuance.
The issuance consisted of two tranches - $1 billion due in 2021, and $1.5 billion due in 2026 - marking the first international bond issuance by the Government of Oman since 1997.
Moody's definitive rating for these debt obligations follows the provisional rating assigned on June 3, 2016, according to a press release issued by the rating agency.
Oman's Baa1 long-term government bond and issuer rating with stable outlook is supported by high levels of wealth, fiscal space offered by relatively low levels of general government debt and still sizable government financial assets, and comparatively low risk that contingent liabilities from the banking system or wider non-financial public sector will crystallise on the government's balance sheet as growth slows.
Although Moody's expects government debt to rise to 33 per cent of gross domestic product (GDP) by 2017 from less than 5 per cent at the onset of the oil price shock in 2014, Oman's fiscal buffers which the rating agency estimates at around 85 per cent of GDP in 2015 will provide support through the process of fiscal and external adjustment.
Oman’s hydrocarbon exports accounted for an average 67 per cent of total goods exports in 2010-15, while oil and gas revenues constituted 87 per cent of total government revenues over the same period.
Upward pressure on the rating would stem from faster-than-currently expected progress on containing government fiscal deficits and debt and diversifying the economy and government finances away from oil.