Bank of Maldives Plc, the country’s largest lender, is holding meetings with global investors to gauge demand for its first foray into international capital markets, a move aimed at shoring up the tourism-dependent economy against the fallout of the conflict in the Middle East.
The bank, which accounts for roughly half of the Maldivian banking sector’s assets and deposits, is meeting fund managers across Asia, the Middle East and Europe to gather feedback on a proposed U.S. dollar sukuk. Abdulla Hassan, the bank’s director for financial strategy and planning, confirmed the roadshow in an interview with Bloomberg News.
The proposed issuance is valued at approximately 300 million dollars and would carry a government guarantee. Dubai-based Mashreqbank is arranging the roadshow and advising the bank on the transaction.
Maldives Finance Minister Ibrahim Ameer Zameer said on social media that the sukuk is not intended to support the national budget or the government’s cash flow needs. Instead, he described it as a joint initiative between the government and the bank to stimulate tourism-led growth in the northern and southern regions of the country. Officials said proceeds from the issuance would help expand the government’s revenue base and support its medium-term fiscal targets.
Government’s Own Access Remains Limited
The bank’s push into international debt markets comes as the government itself appears largely unable to tap those markets directly. Last month, the Maldives repaid, rather than refinanced, a 500 million dollar Sukuk that had come due, a step analysts said points to constrained sovereign access to capital.
A Moody’s analyst, identified as Yiu, said there was little indication the government itself could raise funds this way given the steep premium it would likely need to offer investors. He said proceeds raised by the bank would still benefit the broader economy by injecting foreign currency liquidity at a critical time for the tourism sector, calling it an indirect way of addressing the country’s dollar shortage.
The Maldivian government, through the Ministry of Finance, holds a 50.8 percent stake in Bank of Maldives, with other state-linked entities holding additional shares. Officials have said they have been working to rebuild the country’s foreign currency reserves since they hit a low point in 2024.
Wider Economic Pressures
The Maldives’ tourism industry, the backbone of its economy, has faced disruptions this year linked to the conflict in the Middle East, including flight cancellations and higher fuel costs. At the same time, the expansion of Velana International Airport has more than quadrupled the country’s annual arrival capacity, to about seven million visitors, a factor officials hope will support recovery.
Fitch Ratings upgraded the Maldives’ long-term foreign currency issuer default rating to CCC- from CC in early June, citing reduced near-term default risk following April’s sukuk repayment. The rating remains in speculative, or junk, territory. Fitch cited continuing vulnerabilities, including persistent twin deficits, high public debt, low reserve coverage and heavy reliance on tourism revenue.
Separately, Fitch assigned Bank of Maldives its own long-term issuer default rating of CCC- in June, noting that the bank’s rating is capped by the sovereign rating due to a close financial relationship between the government and the bank. The agency pointed to structural foreign currency shortages and rising impaired loans, while noting the bank’s dominant market position and strong capital buffers.
