Kingdom to issue $1b Eurobond on int’l markets

AMMAN — Jordan is planning to issue a $1 billion Eurobond on international markets in November 2018, Minister of Finance Omar Malhas said on Tuesday.

The move is meant to refinance maturing debt and other budget requirements within the approved debt limits of the budget, the minister told The Jordan Times on the sidelines of the 5th Euromoney Jordan Conference, which attracted over 200 financiers, donors, investors, business leaders, entrepreneurs, policymakers and government officials.

“There is a huge demand on our Eurobonds in the US and in the UK,” the minister noted.

In October last year, Jordan issued $1 billion worth of Eurobonds on international markets. The coupon rate on the 10-year issue was 5.75 per cent with a 5.8 per cent yield, according to Malhas, who added that the underwriting applications for these bonds reached around $4 billion, or 400 per cent of the issuance value.

In April 2017, Jordan successfully issued $500-million worth of Eurobonds on international markets. The bond, whose maturity date is in 2026, was sold with a yield rate of 5.875 per cent and was more than three times oversubscribed, with demand exceeding $1.7 million.

The minister added: “We have no plans for this year to issue sukuk at all as conditions for such a measure are difficult and we do not want to end up in a borrowing race with the private sector.”

On projections for growth, the minister said the country’s economy is expected to grow by 2.2 per cent in 2018.

He added that the ratio of public debt to gross domestic product (GDP) is expected to go down to 94 per cent.

At the end of 2017, Jordan’s overall public debt reached 27.27 billion dinars, representing 95.3 per cent of the GDP, according to official figures.

The minister announced that a delegation from the IMF will visit Jordan in May to conduct a review of the country’s economy, as part of the $700 million Extended Fund Facility (EFF) reached with the lender in 2016.

“A delegation from Jordan will meet with the IMF officials next month to review the recent reforms taken by Jordan under the programme,” Malhas said.

The EFF programme was launched in July 2016 after Jordan signed a letter of intent with the IMF and is expected to last for 36 months.

At the time, the government announced a set of immediate fiscal measures to raise revenues and cut spending in line with the IMF deal, starting January 2017.