Oddity in Bahrain Bonds a Sign Faith in Gulf Aid Not Enough - Bloomberg

Oddity in Bahrain Bonds a Sign Faith in Gulf Aid Not Enough - Bloomberg:

There’s an anomaly forming in Bahrain’s debt market.

The yield on the island kingdom’s dollar bonds maturing July 2022 is about 150 basis points higher than Islamic securities due two years later, according to data compiled by Bloomberg. That’s unusual because longer-dated notes typically have higher yields.

The reason is that demand for the nation’s conventional bonds has waned from investors who were once satisfied with the implicit support Bahrain received from its Gulf allies. Meanwhile, a slowdown in Islamic debt sales has kept demand for Bahrain’s sukuk buoyant by Shariah-compliant investors, who usually buy and hold the notes till maturity.