Bahrain borrows $2 billion in treasury bonds and Islamic sukuk

  The interest ranges between 6% and 6.125% on bonds with a maturity of 12.5 years (AFP)

hurry the two seas The heavily indebted one made a mistake to collect additional liquidity in light of expectations of tightening Financing TermsIt is now preparing to raise $2 billion on Wednesday.

The terms seen by Reuters showed that Manama was marketing dollar-denominated bonds in two tranches, consisting of Islamic sukuk and conventional bonds.

The document revealed that the initial indicative price ranges between 4.25% and 4.375%. for Islamic Sukuk For 7.5 years, and between 6% and 6.125% for bonds with a term of 12.5 years.

These levels were later reduced with an influx of more than $4.7 billion in orders.

Banks “BNP Paribas”, “Citi”, “JP Morgan” and “National Bank of Bahrain” are jointly arranging the sale of the bonds, the price of which is expected to be determined later on Wednesday.

Wealthier Gulf states, Saudi Arabia, Kuwait and the United Arab Emirates, stepped in to support sub-investment-grade Bahrain to avert a credit crunch in 2018 with a $10 billion financial rescue package.

This support was linked to plans to reform its financial situation by curbing government spending, but after the coronavirus crisis pressured its public finances, Bahrain postponed, in September, for two years, plans to balance the budget.

Credit rating agency Moody’s said on Tuesday it expects Bahrain to receive additional funding from its Gulf allies to cover its needs and mitigate liquidity risks.

Saudi Arabia, Kuwait and the United Arab Emirates last month reiterated their support for Bahrain’s plans to adjust its budget, but countries have not publicly committed to providing additional funding.

The International Monetary Fund said Bahrain’s public debt rose to 133 percent of GDP last year from 102 percent in 2019.

On Tuesday, Saudi Arabia raised $3.25 billion in bonds as borrowers sought to take advantage of favorable financial conditions ahead of the expected tightening of fiscal policy by the US Federal Reserve.


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