Bahrain’s default risk climbed to the highest since March, at the height of confrontations between government troops and protesters, amid concern tensions may flare up before Sept. 24 parliamentary elections.
The cost to insure Bahrain’s debt against default rose to 328 yesterday from a post-crisis low of 219 on July 22, according to five-year credit default swaps from data provider CMA, which is owned by CME Group Inc. The contracts surged to 359 on March 15 as Bahrain declared a three-month state of emergency and Gulf troops arrived to help quash the one-month rallies by mostly Shiite protesters.
The protests, by the mainly Shiite majority, left 35 people dead, hurt tourism and spurred the central bank to cut its forecasts for economic growth this year by two percentage points to 3 percent. Standard & Poor’s and Moody’s Investors Service reduced Bahrain’s credit ratings.Credit Agricole SA (ACA), France’s second-largest bank by assets, is relocating its regional headquarters out of Bahrain, two bankers familiar with the matter said last month.
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