Bahraini Bank BBK Plans Bond Issue To Refinance Maturing $500m Debt

The offering by the bank will have a lifespan of between five and seven years.



BBK, formerly known as Bank of Bahrain and Kuwait, is planning its first debt issue since 2010 to refinance an existing $500 million bond maturing in October, its chief executive said on Wednesday.

The offering by Bahrain’s fourth-largest bank by assets will have a lifespan of between five and seven years, CEO Abdulkarim Bucheery told Reuters, adding that the bond’s term would depend on market conditions.

“We are indeed looking to issue a bond, which will be to refinance the existing bond due in October,” Bucheery said, though he declined to confirm that banks had been chosen to arrange the transaction and did not specify when he expects it to take place.

Two sources with knowledge of the matter said that BBK had picked BNP Paribas, HSBC and National Bank of Abu Dhabi to handle the offering.

BBK, which also has operations in Kuwait and India, as well as an office in Dubai, is hoping to take advantage of current low borrowing rates and significant appetite for Gulf debt issues from local and international investors.

The only deal of 2015 so far from the Gulf, a $1 billion sukuk from Dubai Islamic Bank, was more than twice covered by investors.

BBK’s existing $500 million bond was issued in October 2010 and arranged by Citi, Deutsche Bank and HSBC, Thomson Reuters data shows.

Rated BBB by Fitch, BBK is 32.1 per cent owned by the Bahraini government, with the Kuwait Investment Authority also owning a 18.7 per cent stake, according to Thomson Reuters data.