Bahrain does not plan new dollar bond issue this year
Bahrain does not plan to issue new US dollar-denominated bonds this year, a central bank official told investors on Tuesday, after the kingdom secured a $10 billion aid package from Gulf neighbours last week, one source said.
A government spokesperson confirmed that in light of the government’s recently announced fiscal balance programme, there was no plan to issue a new bond this year.
Bahrain, which was hit hard over the past few years by a slump in oil prices, is one of the financially weakest states in the Gulf, with a public debt estimated at 85.5 percent of gross domestic product in 2018.
It has increasingly relied on external funding to refill its state coffers, but in March it had to cancel a planned sale of international conventional bonds as investors demanded higher yields.
An agreement signed last week with Gulf allies Saudi Arabia, the United Arab Emirates and Kuwait for a $10 billion aid package tied to fiscal reforms has averted the risk of a credit crunch.
During a call with bond investors on Tuesday, Shaikh Salman Bin Isa Al-Khalifa, executive director of banking operations at Bahrain’s central bank, said that Bahrain does not have any funding requirements for this year and does not envisage tapping the international debt markets, said the source.
During the call the official reiterated that Bahrain’s debt stock is expected to fall over the coming years and that the $10 billion financial support will be used to reduce its borrowing needs, previously estimated at $20 billion over five years. (RTRS)