Middle-east Arab News Opinion | Asharq Al-awsat

Bahrain tests investor appetite in November sukuk roadshow | ASHARQ AL-AWSAT English Archive 2005 -2017
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DUBAI,(Reuters) – Bahrain will attempt to tap international investors for the first time since political unrest hit the country this year, announcing it will roadshow a benchmark-sized, dollar-denominated Islamic bond later this month.

Investor meetings will start after next week’s Eid al-Adha holiday, taking place simultaneously in Saudi Arabia and Kuala Lumpur on Nov. 14 and London and Singapore on Nov. 15, a banker working on the deal said on Wednesday.

BNP Paribas , Citigroup and Standard Chartered have been mandated to run the potential ijara sukuk issue, the lead manager added.

Ijara sukuk, one of the most common forms of Islamic financing, involves a transfer of tangible assets — most commonly real estate — from one party to the next as Islamic law does not allow for debt or interest payments.

“It is very early to tell whether there will be good investor demand for the issue, it depends on the global environment, what happens over the next week or two,” said Nish Popat, senior investment manager at ING Investment Management. “But also on the size of the issue, where there is relative value to the other sovereign papers in the region

“Investor appetite for Middle East bonds has improved, and we continue to believe that people look at the Middle East for value,” he said.

The Central Bank of Bahrain confirmed on Wednesday it was looking to sell a sukuk but did not give further detail on the size of the issue, nor comment on likely investor demand.

Bankers said in September that Bahrain had mandated the three institutions for a $1 billion sukuk.

Bahrain had initially looked to sell a $1 billion conventional bond at the beginning of the year but, having invited banks to pitch for roles on the transaction, was forced to postpone plans amid political unrest affecting the kingdom and the wider Arab region.

The country last tapped the international debt market in March 2010, when it printed a $1.25 billion ten-year bond. The paper was trading at a spread equivalent to 409.7 basis points over U.S. Treasuries at 1040 GMT.