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Sukuk success

MANAMA: The Central Bank of Bahrain has announced that the latest Sukuk issuance of the government of Bahrain has been successfully placed.

The initial size of the sukuk offering was $500 million, but the issue was oversubscribed by almost eight times.

As a result, the value of the sukuk was raised to $750 million.

"One of the major reasons behind this issue was to establish a yield curve benchmark for longer-term Islamic securities," said CBB executive director banking operations Shaikh Salman bin Isa Al Khalifa.

The benchmark-sized dollar five-year sukuk at a spread of 340 basis points over five-year US Treasuries which was issued yesterday enjoys a rating of "A" by both International rating agencies Fitch and Standard &Poor's.

"This is a testament to Bahrain's strong credit and the confidence which International markets place on the Kingdom's financial sector," added Shaikh Salman.

The sukuk offering was marketed successfully in Asia, the Middle East and Europe and priced well below Bahrain's Credit Default Swaps (CDS) levels.

"This issue reaffirmed the market's appetite to invest Bahrain's debt securities and was well received internationally, with a major portion of subscriptions coming from outside the GCC," added Shaikh Salman.



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