Bahrain has picked four banks to arrange investor meetings ahead of a potential sovereign bond issue, a document from lead managers said on Monday, with proceeds likely to be used to plug an expected budget deficit for 2013.
The International Monetary Fund said in May that it was forecasting a fiscal shortfall of 4.2 percent this year, up from the 2.6 percent deficit reported by the Bahraini government for 2012.
In recent years, the Gulf Arab kingdom, which is not as blessed as its neighbours in terms of hydrocarbon reserves and relies on an oil field it shares with Saudi Arabia for some 70 percent of its budget revenue, has typically issued one international debt offering a year to help manage its finances.
It was last in the market in July last year, with a $1.5bn 10-year bond which yielded 6.143 percent. The paper was trading to yield 5.04 percent at 0909 GMT on Monday.
Roadshows ahead of the potential new deal, a benchmark-sized, dollar-denominated issue, will commence on June 12, the statement said.
One team will hold three days of meetings in the United States before roadshows in London on June 17-18. A second team will visit Riyadh and Abu Dhabi on June 12 and 13 respectively.
Bahrain, rated BBB by Fitch Ratings and Standard & Poor's, has chosen BNP Paribas, Citi, JP Morgan and GIB Capital, the investment banking arm of Gulf International Bank, to arrange the meetings, the statement added.
Benchmark-sized bonds are traditionally understood to be worth at least $500m.
Sources told Reuters on April 29 that the four banks had been picked to arrange a sovereign offering.