Bahrain prices $3bn, three-tranche bond deal; demand tops $15bn

SEPTEMBER 14, 2017

by Kate Allen

The Kingdom of Bahrain has priced its $3bn, three-tranche bond issue at 5.25 per cent for 7.5-year money, with a 12-year maturity at 6.75 per cent and a 30-year tranche at 7.5 per cent. Strong investor demand drove books to top $15bn. The deal includes an $850m, 7.5-year maturity sukuk – the biggest Islamic finance bond to launch since the start of a row over sukuk bonds issued by UAE-based energy company Dana Gas threatened to derail the Islamic finance market earlier this year. In addition to the sukuk Bahrain has raised $1.25bn in a 12-year maturity, and $900m in a 30-year debt tranche. Market conditions for bond issuers are “extremely strong” and investors are not deterred by the controversy over Dana Gas’s legal battle, one banker working on the deal said. The regional dispute between Qatar and its regional neighbours has had “minimal impact” on appetite for Bahrain debt, he added, with bond-buyers’ inquiries focusing on the row’s impact on the country’s economy and trade. Bahrain is rated BB- by S&P and BB+ by Fitch, both with a negative outlook. BNP Paribas, Citigroup, Gulf International Bank, JP Morgan and National Bank of Bahrain acted as bookrunners.

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