Bahrain Set to Issue Dollar Bond with Two-Tranche Deal

Bahrain is gearing up to issue a dollar bond with a two-tranche arrangement, as reported by Bloomberg on Tuesday, citing insider sources. The offering includes a seven-year Islamic note featuring a 6.625% profit rate and a 12-year conventional debt with a yield guidance of approximately eight percent.

This strategic move comes amidst a trend among emerging-market nations rushing to the market to capitalize on the decline in U.S. yields since October and to address fiscal deficits. Bahrain follows in the footsteps of Saudi Arabia, which successfully issued a $12 billion bond just last month.

As a nation heavily dependent on oil production, Bahrain stands as one of the more economically vulnerable countries in the Gulf region. The country faced fiscal challenges during the Covid-19 pandemic, despite having received a $10 billion bailout package from Saudi Arabia and the UAE back in 2018.

Given the external currency in which Eurobonds are issued, they are often referred to as external bonds. Eurobonds play a crucial role in enabling organizations to raise capital while enjoying the flexibility of issuing them in a currency of their choosing.



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