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Thu 26 Feb 2009 12:29 PM

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Bahrain agrees $800m bond issue for housing projects

Gov't authorises housing chiefs to take action to finance new homes in Gulf state.

Bahrain’s government has authorised the Ministry of Housing to issue bonds worth nearly $800 million to finance housing projects in the Gulf state.

Bahrain’s Minister of Housing, Sheikh Ibrahim bin Khalifa Al Khalifa, said that financial institutions will issue the bonds in segments over the next six months.

The Ministry of Housing will use the bonds to fund projects in the housing sector, the recipient of the bulk of Bahrain’s capital investment budget over the next two years, he added in an interview on CNBC Arabiya.

“We do not want to crowd the market too much, but Bahrain is considered to be a financial centre - an Islamic financial centre specifically - so there is a lot of potential to take advantage of in this market,” Sheikh Khalifa said.

He stressed that housing sector expenditures were a government priority and government spending was needed to break out of the global economic crisis.

Bahrain’s Housing Bank will continue to provide housing loans to citizens, using the same criteria applied before September 2008, he added.

“The Bahraini Housing Bank has more than 300,000 client accounts and no congestion problems. Our lending rule is very broad based, leading to fewer problems. The Housing Bank also reviews each borrower’s financial situation with a proper, measured approach,” added Sheikh Khalifa.

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