Bahrain plans to issue Eurobonds

Bahrain plans to issue a dollar bond with a two-tranche deal: a seven-year Islamic note with a 6.625 per cent profit rate and a 12-year conventional debt with a yield guidance of around eight per cent, Bloomberg reported on Tuesday citing sources.

This plan came as emerging-market nations are rushing to the market to take advantage of the drop in U.S. yields since October and to fund fiscal deficits. The country follows the like of Saudi Arabia, which issued a $12 billion bond last month.

Bahrain is heavily reliant on oil production and is one of the more economically vulnerable countries in the Gulf. It faced fiscal strain during the Covid-19 pandemic despite receiving a $10 billion bailout package from Saudi Arabia and the UAE in 2018.

Since Eurobonds are issued in an external currency, they’re often called external bonds. Eurobonds are important because they help organisations raise capital while having the flexibility to issue them in another currency.