Published: November 23, 2011
Offer oversubscribed despite political problems.
The Kingdom of Bahrain has issued a US$750mn sukuk, making it the first sovereign affected by the Arab Spring to visit the international debt markets this year.
This is the kingdom’s fourth international sukuk and, at seven years, on its longest terms.
The issuance highlighted the confidence international investors have in the kingdom despite political upheaval in the region, with new investors participating in the deal.
“Bahrain’s return to the sukuk market through a longer dated issue is part of our desire to create a yield curve in the international sukuk market in the same way that we have in our domestic market,” Sheikh Salman Bin Isa Al Khalifa, executive director of banking operations at the central bank, said.
The issuance was oversubscribed with the final orderbook totalling US$1.8bn, comprising allocations of 62% to Middle East investors, 20% to European investors and 12% to Asia, with 6% in other regions.
Banks were the dominant investor, buying 40% of the issuance, followed by asset managers with 22%. Central banks, sovereign wealth funds and insurance companies also participated.
The lead managers appointed for the issuance were BNP Paribas, Standard Chartered and Citi.
The sukuk, which has been rated BBB by Standard and Poor’s and Fitch, is listed in London.