Bahrain names lead managers for Islamic bond issue

Bahrain’s central bank confirmed on Wednesday it has appointed Deutsche Bank, HSBC Bank and Calyon - the investment banking arm of Credit Agricole - as lead managers for its upcoming sale of sovereign Islamic bonds.The country plans to sell $500 million of five-year bonds compliant with Islamic law from May 27, central bank spokeswoman Nayla Ali Al Khalifa said last month.

It will also issue three-year debt in local currency to raise a further 250 million Bahraini dinars ($662 million), according to news agency Bloomberg.

The sale of sukuks will be the first from the region this year after demand for Islamic debt slumped last year as the global credit crunch intensified.

Last month, Simon Eedle, managing director of Global Islamic Banking at Calyon, told the Reuters Islamic Banking and Finance Summit in Bahrain that he does not expect the sukuk market to pick up again this year.

"I'd be surprised if there were many big deals done this year, it's more waiting to see where the market is going, but everything is taking a lot longer than we thought," he said.

However, he added that foreign investors would be issuing sukuk to tap the Gulf Arab region's ample liquidity compared with other markets.

"Once we get the market functioning ... there is going to be a huge opportunity for the right sectors and the right names to ... tap that Islamic wealth," he said.