MANAMA — Bahrain is sounding out investor appetite at roadshows this week for an international conventional bond issue of up to $1.25 billion and analysts are already suggesting that the issue should attract support at a time when some Western bonds look questionable.
Bankers said Bahrain’s first conventional debt offering since 2010 would be open to qualified investors in the US and elsewhere.
They said the bond might be as large as Bahrain last tapped the international market in November with a $750 million, seven-year sukuk, which was largely sold to investors in the Middle East.
Analysts believe Bahrain is eyeing a seven- or 10-year issue, which should appeal to institutional investors in the West, who have been showing interest in Gulf debt as a safe haven while the financial crisis has hurt other markets around the world. "The timing is very good for Bahrain," said Rasmala Investment Bank sales trader Thomas Christie.
"This issue has been rumored for a long time now. We are seeing GCC credit markets trading at some of the tightest yields for years," he said.
"Combined with the fact that the market is very liquid currently and searching for yield, we should see any Bahrain issue do well."
Analysts said the need to attract conventional investors with the new bond, rather than Islamic investors facing a very limited supply of sukuk, meant Bahrain would have to be fairly generous in pricing the debt. — Agencies