Jordan issues $500 million worth Eurobonds

AMMAN — Jordan has successfully issued $500-million worth of Eurobonds on international markets, the Ministry of Finance said Wednesday.

The bond was sold with a yield rate of 5.875 per cent, the ministry said in a statement e-mailed to The Jordan Times.

The bond, whose maturity date is in 2026, was more than three times oversubscribed with demand exceeding $1.7 million, according to the ministry.

Citigroup and J.P. Morgan managed the issuance.

More than 150 major global investment funds in the US, the UK and Asia as well as some funds from the Arab Gulf were part of the oversubscription.

The issuance of the bond is also a testimony to the effective measures by the government in implementing fiscal reforms.

The issuance is part of the government's plan to meet financial needs in 2017. The plan was developed with a view to diversify financing resources and reduce borrowing costs.

In 2016, Jordan issued $1-billion Eurobonds on international markets. 

The coupon rate on last year's issuance was 5.75 per cent with a 5.8 per cent yield.

Last week, Standard & Poor’s (S&P) reaffirmed its BB-/B credit rating for Jordan, with a “negative” outlook due to a number of domestic and regional factors.

The report cited “very high” economic resilience and credit risk in Jordan, with “intermediate” economic imbalances, while the industrial factors were described of “high” institutional framework, competitive dynamics and system-wide funding. 

Despite low growth, S&P anticipates that the Jordanian authorities will continue to contain fiscal and external balances in 2017-2020, assisted by an International Monetary Fund (IMF) programme.