Bahrain’s sovereign wealth fund Mumtalakat raised $500 million in sukuk, or Islamic bonds, on Tuesday, a document by one of the banks leading the deal showed.
The seven-year sukuk offer a profit rate of 4.25%, according to the document.
Citi, Gulf International Bank GLFBK.UL, HSBC, KFH Capital, National Bank of Bahrain NATB.BH and Standard Chartered STANB.UL arranged the deal.
A seven-year issuance might follow, subject to market conditions, the document said. The deal could be the first international debt sale by a Gulf borrower this year.
The regional debt markets have weakened following last week’s killing by a U.S. drone of Iranian commander Qassem Soleimani, which has sparked fears of a military conflict in the region.
But a sukuk issuance might not be seen as a real test for regional issuers’ ability to access international debt buyers despite market volatility, as sukuk generally benefit from large pent-up demand from regional Islamic investors.
In late December 2018, Mumtalakat’s subsidiary Southern Tourism Comp (STC) acquired its 15th boat from H Al Dhaen Boats. The boat will be used to transport commercial clients and visitors to and from Hawar Islands. Mum holds a 90% stake in H Al Dhaen Boats.
Mumtalakat, rated BB-(minus) by Fitch, raised $600 million in sukuk last year, having obtained orders of around $4 billion for the debt sale.
Source Nasdaq