Bahrain has returned to international debt markets with a twin-tranche dollar offering, raising a total of $2.5 billion through an eight-year sukuk and a 12-year conventional bond. The move marks the latest Gulf sovereign bid to tap robust investor demand despite ongoing economic pressures.
The eight-year sukuk brought in $1.5 billion with a 5.875% coupon, a notable tightening from initial guidance near 6.25%. Meanwhile, the 12-year conventional bond raised $1 billion at 6.625%, slightly below the initial 7% price thoughts.
Investor appetite was strong from the outset, with combined orders topping $8.4 billion. Demand for the sukuk alone exceeded $4.5 billion, while the 12-year bond drew more than $3.9 billion.
Structurally, the sukuk was issued through the CBB International Sukuk Programme Company, maturing in February 2034. The 12-year bond, set to mature in October 2037, falls under Bahrain’s Global Medium Term Note Programme. Both instruments carry expected ratings of B+ from S&P and Fitch, reflecting the kingdom’s current negative outlook.
These offerings will be listed on the Main Market of the London Stock Exchange, with a syndicate of regional and global banks handling the transactions. Abu Dhabi Commercial Bank, Bank ABC, Citi, First Abu Dhabi Bank, GIB Capital, JP Morgan, Sharjah Islamic Bank, and Standard Chartered led the sukuk, while the bond was managed by the same group minus Sharjah Islamic Bank.
The issuance comes amid ongoing pressure on Bahrain’s finances, driven by lower oil revenues and broader market volatility. Earlier this year, the kingdom raised another $2.5 billion via a similar dual-tranche structure. Across the Gulf, sovereign debt activity has surged, with Kuwait, Abu Dhabi, and Saudi Arabia also tapping markets in recent weeks.
