Bahrain has hired banks to arrange a multi-tranche sale of US dollar-denominated sukuk and bonds that would be the country's second bond issue this year, a document from one of the banks arranging the deal showed on Tuesday.
The Gulf state, which averted a credit crunch in 2018 with a $10 billion aid package from its wealthy neighbors, raised $2 billion in May to bolster finances battered by low oil prices and the coronavirus crisis.
"Appetite for yield is high at the moment so I think demand will be high for Bahrain, as it's perceived as a lower-rated country backed by the rest of the GCC," said Raffaele Bertoni, head of debt capital markets at Gulf Investment Corporation, referring to the six-member Gulf Cooperation Council.
Bahrain, rated B+ by S&P and Fitch, hired Bank ABC, Citi, Gulf International Bank, HSBC, National Bank of Bahrain, and Standard Chartered to arrange an investor call on Tuesday, the document said. It plans to issue seven-year sukuk, or sharia-compliant bonds, as well as 12-year conventional bonds and/or 30-year conventional bonds, subject to market conditions.
"They will have no difficulty placing the shorter-dated sukuk with regional investors. Pricing on the 12-year or possible 30-year bond will be driven by international investors," said Doug Bitcon, head of credit strategies at Rasmala Investment Bank.
