Sovereigns to borrow US$6.7 trillion in 2015, absolute debt levels to increase: S&P

HONG KONG - Standard & Poor's latest Global Sovereign Borrowing report projects that the 129 sovereigns it rates will borrow an equivalent of US$6.7 trillion from long-term commercial sources in 2015 – a fall of 5.7% in long-term commercial debt issuance compared with 2014.

It says that the U.S. and Japan will again be the most prolific borrowers this year, accounting for 56% of the total, followed by China, Italy, and India – and that absolute debt levels will continue to increase.

“We project that total outstanding global sovereign commercial debt stock will rise during 2015 by US$689 billion to reach US$44 trillion by the end of this year (at projected market exchange rates),” S&P says.

“We forecast gross long-term commercial borrowing to drop to 8.9% of sample GDP in 2015, from close to 9.5% during the two preceding years. Approximately two-thirds, or US$4.5 trillion of the sovereigns' gross borrowing, will be to refinance maturing long-term debt, resulting in an estimated net borrowing requirement of US$2.2 trillion, or 2.9% of the GDP of rated sovereigns.
“Consequently, we project that commercial debt stock of sovereigns we rate will rise by 1.7% to reach an equivalent of US$44.3 trillion by the end of 2015, and that the total commercial and official bilateral and multilateral debt stock will reach US$45.5 trillion (up 1.4% year on year).
“We expect that outstanding short-term commercial debt will be broadly unchanged at US$5.4 trillion at year-end 2015, or 12% of total commercial debt stock. All numbers presented in this report have been converted into U.S. dollar and therefore reflect the strengthening of the dollar against many important issuance currencies.  www.standardandpoors.com (ATI).