Oman has borrowed 600 million rials ($1.56 billion) from its sovereign fund, the Oman Investment Authority, and another 1.77 billion rials through external and internal borrowings to partly finance its 2021 budget, the finance ministry said.
The total borrowing of 2.37 billion riyals is 56 percent of the 4.2 billion rials worth of financing required this year, the ministry said in its March fiscal performance report.
The loan, now being marketed to a wider group of lenders, has a 15-month maturity with the possibility to extend it by an additional 12 months at the borrower’s discretion.
The report came as rating agency S&P Global Ratings last week affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Oman.
S&P expects the increase in the Omani government’s net debt to remain elevated through 2024, but it should decelerate relative to 2020, on the back of higher oil prices and a fiscal reform plan.
Oman faces large external debt maturities over 2021-2022, the rating agency said, expecting it will have to rely on external debt to fund the deficits and maturing debt.
It was the first Gulf government to tap the international markets this year, raising $3.25 billion in January. It also signed a $2.2 billion loan in early March with a large group of banks.
The fiscal report said Oman, as of end-March, still required 1.83 billion rials in financing for this year.
By end-February, Oman had paid 144 million rials in debt servicing and repaid 563 million rials in principal for some loans, the report said.
Oman’s economy likely shrank 6.4 percent in 2020, the International Monetary Fund said.
In January, the largest oil exporter outside of OPEC sold $3.25 billion in a three-part debt offering.
Oman’s external debt maturing this and next year amounts to $10.7 billion, or about 7.5 percent of gross domestic product, S&P Global Ratings has said.