Asia-Pacific sovereigns debt may top $16.7 tn this yr,up 4.7%

MUMBAI: The stock of commercial debt from the Asia-Pacific sovereigns is likely to rise 4.7 per cent or by $2.6 trillion from last year to touch $16.7 trillion by the end of the year, a report by Standard & Poor's Ratings Services said.

However, India, the third largest borrower in the region, will not add any incremental debt this year and is likely to retain its share at 8.7 per cent of the total.

"New Delhi's borrowing is likely to stabilise at 8.7 per cent as growth of debt issuance slows markedly with continued fiscal consolidation in the year," it said.

'Asia-Pacific sovereign debt report 2015' also said that the 21 Asia-Pacific sovereigns which it rates will borrow an equivalent of $2.6 trillion from long-term commercial sources this year, to reach $16.7 trillion.

This $2.6 trillion in new debt would be on par with long-term commercial debt issuance from 2014, as declines in Japanese and Australian borrowings offset increases elsewhere, said the agency's credit analyst Kim Eng Tan.

"Some 63 per cent of the sovereigns' gross long-term commercial borrowings will be for refinancing maturing debt, resulting in estimated net borrowings of $943 billion," Tan said, adding together with the bilateral and multilateral debt, the total stock will reach $16.7 trillion, a year-on-year jump of $744 billion or 4.5 per cent.

Out of the fresh debt sales, the agency projects the share of AAA commercial sovereign debt will be close to 4.1 per cent, while BBB debt and below this is set to account for about 10 per cent.