DEAL: Bahrain’s first benchmark-size sukuk issuance

Author: Amélie Labbé | Published: 31 Oct 2016

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...


 

 

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