Bahrain picked five banks including JPMorgan Chase & Co to manage the third sale of Eurobonds by the Gulf country this year, according to two people with knowledge of the plan.
BNP Paribas, Standard Chartered, Credit Suisse Group 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 $500mn.
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% of gross domestic product this year from 62% in 2015 and the budget deficit widening to 15.4% of economic output from 14.8% 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 $435mn of privately placed dollar sukuk in May and in February it raised $600mn 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.
Stacks of containers sit at Khalifa Bin Salman port in Hidd, Bahrain (file). Bahrain, the smallest economy among the Gulf Cooperation Council states, sold $435mn of privately placed dollar sukuk in May and in February it raised $600mn via five- and 10-year bond retaps.
