Bahrain has raised $3bn in a three-tranche international bond issue which was met with strong market appetite with order books in excess of $15bn. The deal, the kingdom’s largest ever bond, consisted of a 7.5-year $850mn Islamic sukuk priced at 5.25%; a 12-year $1.25bn conventional bond priced at 6.75%; and a 30-year $900mn conventional bond priced at 7.50%.
The deal was arranged by BNP Paribas, Citi, Gulf International Bank, JP Morgan and National Bank of Bahrain. Oversubscription of the Bahrain bond issue shows that the regional dispute in the GCC, between Qatar on the one hand and Saudi Arabia, the UAE and Bahrain on the other, does not seem to have deterred investors from participating. According to Bloomberg, Bahrain refused to process bids by Qatari investors because of the current dispute. Bahrain is rated junk by all three major credit agencies, with all three issuing negative reviews in recent months. It is therefore paying considerably higher rates on the bond than its fellow GCC states. (CONTINUED - 663 WORDS)