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Standard & Poor’s: Global sovereign borrowing will reach $10.4 trillion

Global sovereign borrowing

London, (Business News Report)|| Global sovereign borrowing is expected to reach $10.4 trillion by the end of this year, a number that has not been recorded for many years, said credit rating agency Standard & Poor’s.

Standard & Poor’s said that global sovereign borrowing will be approximately a third more than the average before the Coronavirus pandemic.

The sovereign debt of emerging economies in Europe, the Middle East and Africa will rise by $253 billion to the equivalent of $3.4 trillion by the end of the year, the agency said.

Standard & Poor’s analysts predict that Egypt, which recently sought help from the International Monetary Fund, is set to overtake Turkey as the region’s largest sovereign debt issuer, with bond sales worth $73 billion.

Two weeks ago, Egypt offered, for the first time in its history in the Middle East, international bonds denominated in the Japanese yen in the Japanese market, at a value of $500 million, equivalent to about 60 billion yen.

The Russian war on Ukraine has forced at least 100 companies worldwide to postpone or withdraw financing deals worth more than $45 billion since the beginning of the Russian invasion of Ukraine, including initial public offerings, bonds or loans and acquisitions.

Delays by companies come as the conflict has disrupted financing markets, hurting investor sentiment for risk and increasing uncertainty about growth, raising interest rates and supply chains.

Investors in corporate debt are bracing for more trouble ahead after a turbulent quarter, as economic concerns remain, while the end of the war in Ukraine may be elusive.

The world’s safest corporate debt index has already shrunk by $805 billion so far this year.

Meanwhile the global market for high-risk corporate debt lost $236 billion, according to data compiled by Bloomberg.

It is the biggest drop in value since records began more than 20 years ago, following a craving for borrowing prompted by a record drop in financing costs.

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