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Bahrain on 23 February launched a $600mn bond issue, less than a week after its credit rating was downgraded two notches to junk status (BB) by Standard and Poor’s (MEES, 19 February).
Bahrain initially cancelled a $750mn bond sale after the downgrade, but decided to reopen it this week at a reduced $600mn, consisting of a $275mn five-year tranche with a yield of 5.95% and a $325mn ten-year tranche with a yield of 7.65%.
Bahrain obviously had to accept higher pricing after the downgrade: it had initially sought to price the bond at 5.70% for five years and 5.95% for ten years. Bank ABC, BNP Paribas, Citigroup, HSBC and JP Morgan arranged the new bond. Bahrain had originally considered a larger bond of $1.5bn at the beginning of 2016, like the one launched at the end of 2015 (MEES, 5 February).
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