According to Bloomberg, Bahrain has raised $500 million from a private bond with five GCC banks for much-needed relief as it negotiates crucial financial support.
The bonds were placed with Bank ABC, Emirates NBD, Kuwait Finance House, Noor Bank, and Sharjah Islamic Bank, as part of a “GCC rescue package.”
A sell-off in emerging-market assets is prompting some countries to bypass the scrutiny of international bond investors through private bonds. For Bahrain, the funds also give officials time to agree on the details of the aid package with Saudi Arabia, the United Arab Emirates and Kuwait.
With rising public debt and low foreign-exchange reserves, investors say the kingdom needs support to avert a currency devaluation that could reverberate across the region.
“They haven’t released any details on the GCC rescue package, so they wouldn’t have been able to issue publicly,” said Anthony Simond of Aberdeen Asset Management Plc.
While Bahraini officials have not commented on the matter, authorities have said they have enough reserves to maintain the currency’s peg to the dollar.