AIRLINK 188.48 Decreased By ▼ -1.04 (-0.55%)
BOP 12.70 Decreased By ▼ -0.07 (-0.55%)
CNERGY 7.25 Increased By ▲ 0.09 (1.26%)
FCCL 42.47 Increased By ▲ 0.35 (0.83%)
FFL 15.45 Decreased By ▼ -0.09 (-0.58%)
FLYNG 25.23 Increased By ▲ 0.04 (0.16%)
HUBC 133.46 Increased By ▲ 3.37 (2.59%)
HUMNL 14.40 Increased By ▲ 0.08 (0.56%)
KEL 4.79 Increased By ▲ 0.12 (2.57%)
KOSM 6.34 Decreased By ▼ -0.17 (-2.61%)
MLCF 49.04 Increased By ▲ 2.10 (4.47%)
OGDC 210.37 Increased By ▲ 7.62 (3.76%)
PACE 6.43 Decreased By ▼ -0.01 (-0.16%)
PAEL 42.49 Increased By ▲ 1.35 (3.28%)
PIAHCLA 16.89 Decreased By ▼ -0.14 (-0.82%)
PIBTL 8.92 Increased By ▲ 0.21 (2.41%)
POWER 10.73 Increased By ▲ 0.03 (0.28%)
PPL 178.06 Increased By ▲ 5.85 (3.4%)
PRL 35.24 Increased By ▲ 0.47 (1.35%)
PTC 24.81 Decreased By ▼ -0.04 (-0.16%)
SEARL 96.83 Increased By ▲ 0.11 (0.11%)
SILK 1.11 Increased By ▲ 0.01 (0.91%)
SSGC 31.89 Increased By ▲ 1.31 (4.28%)
SYM 17.72 Decreased By ▼ -0.17 (-0.95%)
TELE 8.31 Decreased By ▼ -0.09 (-1.07%)
TPLP 11.86 Decreased By ▼ -0.03 (-0.25%)
TRG 63.27 Decreased By ▼ -0.08 (-0.13%)
WAVESAPP 11.64 Increased By ▲ 0.01 (0.09%)
WTL 1.49 Decreased By ▼ -0.01 (-0.67%)
YOUW 3.94 Decreased By ▼ -0.11 (-2.72%)
AIRLINK 188.48 Decreased By ▼ -1.04 (-0.55%)
BOP 12.70 Decreased By ▼ -0.07 (-0.55%)
CNERGY 7.25 Increased By ▲ 0.09 (1.26%)
FCCL 42.47 Increased By ▲ 0.35 (0.83%)
FFL 15.45 Decreased By ▼ -0.09 (-0.58%)
FLYNG 25.23 Increased By ▲ 0.04 (0.16%)
HUBC 133.46 Increased By ▲ 3.37 (2.59%)
HUMNL 14.40 Increased By ▲ 0.08 (0.56%)
KEL 4.79 Increased By ▲ 0.12 (2.57%)
KOSM 6.34 Decreased By ▼ -0.17 (-2.61%)
MLCF 49.04 Increased By ▲ 2.10 (4.47%)
OGDC 210.37 Increased By ▲ 7.62 (3.76%)
PACE 6.43 Decreased By ▼ -0.01 (-0.16%)
PAEL 42.49 Increased By ▲ 1.35 (3.28%)
PIAHCLA 16.89 Decreased By ▼ -0.14 (-0.82%)
PIBTL 8.92 Increased By ▲ 0.21 (2.41%)
POWER 10.73 Increased By ▲ 0.03 (0.28%)
PPL 178.06 Increased By ▲ 5.85 (3.4%)
PRL 35.24 Increased By ▲ 0.47 (1.35%)
PTC 24.81 Decreased By ▼ -0.04 (-0.16%)
SEARL 96.83 Increased By ▲ 0.11 (0.11%)
SILK 1.11 Increased By ▲ 0.01 (0.91%)
SSGC 31.89 Increased By ▲ 1.31 (4.28%)
SYM 17.72 Decreased By ▼ -0.17 (-0.95%)
TELE 8.31 Decreased By ▼ -0.09 (-1.07%)
TPLP 11.86 Decreased By ▼ -0.03 (-0.25%)
TRG 63.27 Decreased By ▼ -0.08 (-0.13%)
WAVESAPP 11.64 Increased By ▲ 0.01 (0.09%)
WTL 1.49 Decreased By ▼ -0.01 (-0.67%)
YOUW 3.94 Decreased By ▼ -0.11 (-2.72%)
BR100 12,026 Increased By 161.7 (1.36%)
BR30 36,105 Increased By 784.7 (2.22%)
KSE100 114,330 Increased By 1529.2 (1.36%)
KSE30 35,612 Increased By 576.2 (1.64%)

imageDUBAI:Bahrain is working with banks about a potential re-tap of a dollar-denominated two-part bond issued late last year, sources with knowledge of the deal told Reuters on Wednesday.

The finances of the small energy exporter, with less generous oil and financial reserves than its neighbours, have been hard hit by the drop in oil prices, which touched a 12-year low earlier this month.

The kingdom is working with the same five banks which arranged its $1.5 billion bond in November, which was split between five- and 10-year portions paying 5.875 percent and 7.0 percent respectively, according to three sources with knowledge of the matter.

Any potential re-tap could happen within the next two to three months, one of the sources added.

Bahrain's central bank, which organises the kingdom's borrowing, didn't respond to a request for comment. The sources spoke on condition of anonymity as the information is private.

Under a tap transaction, a 'new' deal is issued which is, in effect, a copy of an existing bond with the same terms and conditions. However, the pricing is usually adjusted to reflect the market performance between the issuances.

Taps are rare in the Middle East, with only a handful in recent years, but the structure would have benefits for Bahrain, mostly due to the speed at which the kingdom could access the market instead of waiting for new documentation to be drawn up for a separate issue.

This could potentially save the kingdom from paying much higher interest rates, as a combination of significant issuance this year by other Gulf entities squeezes available liquidity and markets weigh the risk of an eventual U.S. interest rate rise.

Gulf governments look set to borrow from the international bond market at a record pace this year as they cover budget deficits -- which are expected to near $140 billion, or 11 percent of gross domestic product.

Qatar is talking to potential arrangers of a first sovereign sukuk in nearly four years, sources told Reuters earlier this week, and Sharjah, one of the seven United Arab Emirates, sold a $500 million Islamic bond earlier this month.

With the kingdom on the last rung of investment grade according to international credit-rating agencies, any further downgrade would put its debt into junk status, ruling it out for some international investors and pushing up borrowing costs further.

Bank ABC, BNP Paribas, Citigroup, HSBC and JP Morgan arranged last year's transaction and are working again with the kingdom.

At 1430 GMT, the five-year portion of the existing bond, which matures in January 2021, was trading to yield 5.63 percent and the ten-year bond maturing in January 2026 was trading at 7.20 percent, according to Thomson Reuters data.

Copyright Reuters, 2016

Comments

Comments are closed.