Bahrain launches $1 billion 7.5-year sukuk to yield 6 7/8%, nixes planned conventional bond

By Rebecca Melvin

New York, March 28 – The Kingdom of Bahrain launched a $1 billion 7.5-year sukuk, or Islamic bond (estimated ratings: /B+/BB-), to yield 6 7/8% and has decided not to proceed with plans to issue another tranche of 12- and/or 30-year conventional bonds, according to a syndicate source on Wednesday.

Pricing for the sukuk was at the tight end of guidance for a yield in the area of 7%, and order books had been around $1.5 billion.

The issuer decided to table the conventional bond following roadshow meetings that wrapped up on Tuesday, but no specific explanation was made, the syndicate source said.

BNP Paribas, Citigroup, Gulf International Bank, National Bank of Bahrain and Standard Chartered are the joint bookrunners for the Rule 144A and Regulation S sukuk, for which final terms were expected to be set later on Wednesday.

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