The report forecasts continued growth in both earnings before interest, taxes, depreciation, and amortization (EBITDA) and capital expenditure (capex) across the region, fueled by ambitious economic development plans. This suggests that creditworthiness of rated companies will either stay consistent or improve slightly.
The report also highlights manageable refinancing risks for most rated entities, attributing it to the fact that 75-80% of the debt maturing in 2024 belongs to highly rated government-related entities (GREs). For the infrastructure sector, the report anticipates an acceleration in implementing decarbonization initiatives following the upcoming COP28 conference. Additionally, infrastructure issuers are expected to return to the capital markets for debt refinancing.
However, the report acknowledges the potential threat posed by high geopolitical risks in the region, particularly for companies reliant on investor confidence. These risks could negatively impact these companies' financial performance and creditworthiness.
GCC corporates and infrastructure projects are generally well-positioned to navigate the challenging global economic environment in 2024. However, certain sectors or entities may face specific challenges due to refinancing needs or dependence on investor sentiment.
