The Kingdom of Bahrain has sold its first benchmark-size
sukuk, a deal that is expected to attract more
international investment in the country.
The $1 billion sukuk was priced at 5.625% on the
Irish stock exchange, and primarily structured as an Islamic
finance sale-leaseback. The government of Bahrain relied on the
traditional Ijara structure but also introduced a
Wakala agency agreement element to the bond.
The sukuk was issued in parallel with a $1 billion
eurobond, a growing trend in some of the more active Islamic
finance markets such as Indonesia and some Gulf Cooperation
Council (GCC) countries. According to Gregory Man, partner at
Norton Rose Fulbright in Dubai, who co-led on the deal, the
government of Bahrain had not committed to deal size in advance
of the roadshow. The combined offering was 3.5 times
oversubscribed, with orders exceeding $7 billion.
In comparison, a previous privately-placed sukuk...