Bahrain Said to Mandate JPMorgan, BNP, StanChart for Bond Saleby and
Credit Suisse Group, Bahrain’s Bank ABC will also manage sale
Planned sale will be the third of eurobonds this year
Bahrain picked five banks including JPMorgan Chase & Co. to manage the third sale of Eurobonds by the Persian Gulf country this year, according to two people with knowledge of the plan.
BNP Paribas SA, Standard Chartered Plc, Credit Suisse Group AG and Bahrain’s Bank ABC were also mandated to manage the sale, said the people, asking not to be identified because the information is private.
The issue of benchmark-sized bonds by the government, which is rated junk by all the major rating companies, may take place after August, people familiar with the plans said last week. Investors typically classify benchmark size as a deal of at least $500 million.
S&P Global Ratings lowered Bahrain because its vulnerability to slumping oil prices has increased since 2009 as government expenditures started to rise in response to the global economic slowdown and civil unrest. Fitch expects Bahrain’s general government debt to rise to almost 80 percent of gross domestic product this year from 62 percent in 2015 and the budget deficit widening to 15.4 percent of economic output from 14.8 percent last year.
The growing deficit pushed the government to tap both the domestic and international markets to fund spending. Bahrain, the smallest economy among the Gulf Cooperation Council states, sold $435 million of privately placed dollar sukuk in May and in February it raised $600 million via five- and 10-year bond retaps.
Spokesmen for the Central Bank of Bahrain, JPMorgan and Bank ABC didn’t immediately respond to an e-mail seeking comment, while spokesmen for BNP Paribas, Standard Chartered and Credit Suisse declined to comment.