Bahrain taps bond market for first time since $10bn bailout package

Bahrain sold $2bn of bonds in a two-part deal about a year after it secured a bailout package from its wealthier neighbours.

The island kingdom sold dollar-denominated Sharia-compliant securities due 2027 and a conventional bond maturing in 2031, according to a person familiar with the matter, who isn’t authorised to speak publicly and asked not to be identified.

Details of Bahrain’s bond sale:

* Sukuk due 2027 at a yield of 4.5 per cent versus initial price thoughts of between 4.875 per cent and 5 per cent

* Bond due 2031 at a yield of 5.625 per cent versus indicative price range of 5.875 per cent to 6 per cent

The issuance comes amid a sudden surge in debt sales by frontier and emerging sovereigns after the cost of borrowing declined. On Monday, Abu Dhabi raised $10bn and South Africa finalised its biggest-ever debt deal.

Bahrain’s debt sale is the first since Gulf Arab allies pledged $10bn in aid in October to help stabilise the nation’s fragile finances. It delayed an offering earlier this year.

BNP Paribas SA, Citigroup Inc., Gulf International Bank BSC, JPMorgan Chase & Co., National Bank of Bahrain BSC and Standard Chartered managed the offering.

Bahrain is rated B+ by S&P Global Ratings, four notches below investment grade.