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Ask Your Advisor: What to do with Saudi Arabia and Oman bonds
Despite the precarious situation in the Strait of Hormuz, we still like Saudi Arabia and Oman sovereign bonds
By Earl Andrew “EA” Aguirre
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We have published about our thoughts on the Kingdom of Bahrain’s sovereign bonds in the middle of this US-Israel war with Iran, which is just one of several since last year.
But what about its much larger neighbors – the Kingdom of Saudi Arabia and the Sultanate of Oman?
An A for KSA
The Kingdom of Saudi Arabia’s “A” credit rating continues to be the bar to surpass in the region. But despite the high credit standards attributed to the kingdom, its sovereign bonds continue to pay generous yields not too far off from bonds rated BBB.
On tackling the issue of exporting oil, the country has alternative options for moving crude—such as the East-West pipeline that allows exports to bypass the Strait of Hormuz—though this route cannot absorb the full volume typically channeled through the strait.
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