Mena region countries affected by unrest are expected to struggle to find international buyers of their debt this year.
Global appetite for bonds and other debt issued by regional governments has waned in recent weeks.
"The sovereigns with the highest debt levels will face the most challenges," Kai Stukenbrock , the director of Europe, Middle East and Africa sovereigns ratingsfor Standard & Poor's, said yesterday.
Countries such as Egypt and Jordan have the ability to absorb some debt through domestic markets, removing the risk for international investors, Mr Stukenbrock said.
Bond sales in the Middle East had been tipped to rise this year as investor appetite improved after the global financial crisis. A series of issues following a US$1.25 billion (Dh4.59bn) bond sale by Dubai in September had set the scene for a renewed surge in sales this year.
But instead, there has been a slowdown in interest globally. Unrest in parts of the Mena region, along with rising inflation in some markets, led to investors withdrawing $1.15bn from emerging market bond funds last month.
Sovereign debt insurance costs have also risen for several countries after ratings agency downgrades followed civil unrest. As a result, recent local issuers have had to rely on local demand.
Last month, Egypt raised most of the 15 billion pounds (Dh9.33bn) it sought at a debt auction from local banks.
Despite the uncertain outlook in parts of the region, other issuers are forecast to test the market this year.
"The fourth quarter of 2010 saw a surge in debt issuances largely for the purpose of refinancing maturing debt and partly for business expansion," Dr Jehad el Nakla, the general manager of Moody's Middle East, said in Dubai yesterday.
"According to public announcements, this trend is likely to continue during the first half of 2011, despite the political instability in some Middle Eastern countries."
Capital markets in the region are not as developed as those in the western world. A more established debt market is seen as a way of offering borrowers greater flexibility and a wider range of funding sources. It could also help reduce companies' reliance on short-term bank finance.