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Mon 10 Jun 2013 12:48 PM

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Bahrain picks banks for potential bond issue

Four banks set to arrange investor meetings; roadshows to start on June 12

Bahrain picks banks for potential bond issue
BNP Paribas is one of the four banks chosen by Bahrain ahead of a potential bond issue.

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.

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