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  • 06-04-23

    Jordan Issues Oversubscribed USD1.25 Billion Eurobonds, Reflecting Global Investor Confidence

    (MENAFN) Jordan issued USD1.25 billion of Eurobonds at 7.5 percent, which were oversubscribed six times, reflecting global investor confidence in the country's fiscal and monetary stability, according to Jordan Finance Minister Mohammad Al Ississ. The over-subscription allowed the government to raise the amount over a five-year and nine-month maturity from the original USD750 million sought after attracting bids worth more than USD4.7 billion. More than 230 investment institutions, including top funds in the US, Europe, and the Gulf, piled into the latest issue, allowing a reduction in yields at a time when other sovereigns were struggling to attract investor interest.

    The high demand for Jordan's Eurobonds is testimony to the strength of the fundamentals of the Jordanian economy, according to Central Bank Governor Adel al-Sharkas. Jordan's commitment to International Monetary Fund (IMF) reforms and investor outlook confidence helped it maintain stable sovereign ratings at a time when other emerging markets were being downgraded. Several ratings agencies have in recent months either upgraded or affirmed the country's credit ratings, including Moody's, which last November upgraded the kingdom's rating outlook to positive from stable.

    Ratings agency S&P noted last month that Jordan was moving ahead with reforms aimed at enhancing investment, widening the tax base, and targeting corruption, forecasting that fiscal imbalances would moderate in the coming years. Al Ississ, an advocate of fiscal prudence, said an unprecedented clamp down on tax evasion has pushed the kingdom's domestic revenues beyond IMF targets for the first time in many years without hurting growth.

    The move to global markets also eases government debt issues to local banks to fund the deficit that has crowded out credit to the private sector, according to bankers. The IMF stated at the end of last year that progress with structural reforms had cushioned the economy and strengthened macro-economic stability, boosting Jordan's growth in 2022 despite global economic turbulence. Jordan's successful Eurobond issue indicates a positive outlook for the economy, which may attract more foreign investment and improve the country's overall economic prospects.

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