Bahrain Said to Raise $435 Million From Privately Placed Sukukby
Noor Bank, Bank ABC and Kuwait Finance House debt arrangers
Three-year debt’s profit rate 325 basis points over midswaps
Bahrain, whose debt rating was lowered by Moody’s Investors Service on the weekend, tapped the dollar-bond market for a second time in three months, according to two people familiar with the matter.
The Gulf nation appointed Noor Bank, Bank ABC and Kuwait Finance House to arrange a $435 million, privately placed Islamic offering, the people said, asking not to be identified because the information is private. The three-year debt will have a profit rate of 325 basis points over midswaps. Moody’s on Saturday reduced Bahrain’s long-term credit rating one step to Ba2, two levels below investment grade.
The island state is attempting to shore up state finances pressured by the drop in oil prices. Bahrain’s vulnerability to a decline in crude increased since 2009 when government expenditure started to rise in response to the global economic slowdown and civil unrest in the country. The sovereign last tapped the dollar-bond market in February when it raised $600 million, a week after S&P Global Ratings cut the nation’s credit to junk.
Spokesmen for Bahrain’s central bank, Kuwait Finance House and Bank ABC didn’t immediately respond to calls or e-mails. No one at Noor Bank was immediately available for comment.