MANAMA: Bahrain has mandated banks for a dual-tranche dollar-denominated bond issue, which would be its first since it obtained a $10 billion aid package from its Gulf allies last year to avert a credit crunch.
The kingdom is looking to issue seven-year Islamic bonds and 12-year conventional bonds, according to a document seen by Reuters.
It has mandated BNP Paribas, Citi, Gulf International Bank, JP Morgan, National Bank of Bahrain and Standard Chartered to organise investor meetings in Asia, the US, Middle East and Britain from tomorrow, according to the document.
The Bahraini government last year received $10bn in pledges from Saudi Arabia, Kuwait and the UAE after low oil prices pushed its public debt to almost 93 per cent of gross domestic product.
Its existing bonds have since jumped back, as investors know that Bahrain can count on support from its wealthier allies while it seeks to repair its debt-ridden finances.
Bahrain is aiming to balance its budget by 2023, a target it set for itself as part of last year’s package, when it embarked on a series of reforms including further subsidy cuts and the introduction of a five per cent Value Added Tax.
Out of the $10bn Gulf aid, Bahrain received $2.3bn last year and is expecting another $2.28bn in 2019, the government said in May.
It is set to receive further payments of $1.76bn in 2020, $1.85bn in 2021, $1.42bn in 2022 and $650 million in 2023.
This year, it expects a deficit of 4.7pc of GDP, down from a 6.2pc last year.
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