Bahrain to raise $2 billion in bond sale after deficit spike | Reuters

Bahrain to raise $2 billion in bond sale after deficit spike | Reuters

Bahrain is expected to raise $2 billion in a three-tranche bond sale on Wednesday, a document showed, after the coronavirus pandemic and low oil prices exacerbated its fiscal deficit and pushed total outstanding debt to nearly $40 billion.

The debt sale comes amid uncertainty over future fiscal help for the small oil-producing state, as wealthier Gulf neighbours who have previously come to Bahrain’s aid have their own financial woes to deal with.

Bahrain gave initial price guidance of around 4.875% for a seven-year bond tranche, around 5.75% for 12-year notes and around 6.75% for 30-year bonds, according to the document from one of the banks arranging the deal.

Bahrain’s fiscal deficit is estimated to have more than doubled to $4.4 billion last year, compared with a budgeted $2.1 billion, according to a bond prospectus reviewed by Reuters, that cited preliminary estimated figures.