DUBAI, July 26 (Reuters) - Bahrain’s government has sent out a request for proposals to banks to arrange issues of U.S dollar-denominated conventional bonds and sukuk, sources familiar with the matter said on Wednesday.
The issues would be conducted simultaneously, perhaps as soon as before September, they said, adding that the size of the issues had not been indicated.
Bahrain’s central bank did not respond to a request for comment.
Bahrain needs to raise external financing to plug a budget deficit caused by low oil prices, as the small Gulf state struggles to build political consensus around planned austerity measures.
Last month the cabinet approved a draft budget projecting a 1.3 billion dinar ($3.4 billion) deficit for 2017 and a 1.2 billion dinar deficit in 2018. Bahrain had a deficit of 1.5 billion dinars in 2016.
Bahrain raised $2 billion in the international markets last October through a $1 billion conventional bond and a $1 billion sukuk issue. Bank ABC, BNP Paribas, Credit Suisse, JP Morgan and Standard Chartered arranged that deal.
In February, Bahrain tapped the conventional bond maturing in 2028, raising an additional $600 million.
Bahrain is rated BB-minus by Standard & Poor’s with a negative outlook. The agency last month revised the outlook to negative from stable, citing Bahrain’s weakening external asset and fiscal positions. Fitch followed suit, revising the country’s outlook to negative but affirming its BB+ rating. (Editing by Andrew Torchia)
Our Standards: The Thomson Reuters Trust Principles.