Font Size

- Aa +

Wed 16 Jun 2010 04:21 PM

Font Size

- Aa +

Bahrain wealth fund to launch bond roadshow

Bond's proceeds to be used to reduce short-term borrowings, corporate purposes.

Bahrain wealth fund to launch bond roadshow
MARKET WATCH: Issuance from the Middle East suffered in the wake of last Novembers debt repayment standstill by Dubai.(Getty Images)

Bahrain's sovereign wealth fund has joined a rush by Gulf entities to market bonds and, according to a source at one of the arranging banks, plans to meet Asian and European fixed income investors from Thursday.

The state-owned wealth fund Mumtalakat Holding has appointed Deutsche Bank, HSBC, JPMorgan and Standard Chartered to arrange the meetings.

While sources at the arranging banks declined on Wednesday to comment on a possible bond, ratings agencies Fitch and Standard & Poor's assigned 'A' ratings to the expected issue which S&P said would be an unsecured US dollar bond.

Fitch said Mumtalakat planned to use the bond's proceeds to "reduce short-term borrowings and for general corporate purposes". Mumtalakat plans to meet Singapore and Hong Kong investors on Thursday and Friday, then investors in Riyadh and Abu Dhabi on Saturday and Sunday respectively, a syndicate official said.

It will then hold meetings in London on Monday and conclude in Germany and Switzerland on Tuesday.

Mumtalakat's investor meetings come on the heels of a roadshow by the emirate of Dubai. Fund managers who attended the meetings said Dubai could issue a dollar-denominated Islamic bond as early as the third quarter.

Emerging bond markets are improving and other Gulf names that held presentations at the end of May, but were forced to postpone their deals, could return to capital markets if the paralysis in the markets lifts.

Analysts say appetite for the region is reviving following the well-received restructuring of Dubai World [DBWLD.UL] debt. The emirate's state-owned conglomerate reached a deal in principle last month to restructure $23.5 billion with core creditors.

"There are four to five issues that are coming, one after another. That's quite a lot of supply. Local investors will probably take up most of this," said one London-based fund manager.

Qatar's Diar, the property arm of the country's sovereign wealth fund, is preparing a $3.5 billion dual-tranche bond.

Saudi Basic Industries Corp (SABIC) could return to markets after postponing a benchmark dollar bond scheduled for May.

Abu Dhabi's government-owned Mubadala Development Company could also tap the market soon, fund managers say.

Issuance from the Middle East suffered in the wake of last November's debt repayment standstill by Dubai.

Recent data from ING Bank shows that the Middle East and Africa accounted for 9 percent of emerging corporate bond issuance in the first five months of 2010, down from 16 percent in 2009. (Reuters)

For all the latest Bahrain news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.