Bahrain has launched a $600m bond sale less than a week after its credit rating was downgraded to junk status.
The move is seen as an indication from the government that it still has access to international credit markets.
Last week, Bahrain cancelled a $750m bond sale after Standard & Poor’s cut the kingdom’s credit rating by two notches to BB/B. It is the first Gulf control to fall below investment grade in the region’s current economic downturn.
Orders for the new offer exceeded $900m, a document from leader managers showed, according to Reuters.
Pricing for a $275m five-year tranche was a set at a yield of 5.950 per cent. The $325m 10-year tranche was set at 7.650 per cent, the newswire said.
This compared to rates of 5.7 per cent for the five-year tranche and 7.40 per cent for the 10-year tranche in last week’s sale.
Central bank governor Rasheed Mohammed al-Maraj said on Tuesday that Bahrain would take drastic steps to keep its deficit in check.
He reiterated the kingdom's commitent to its currency peg with the US dollar.
Bahrain’s budget deficit stood at about $4bn last year and is expected to remain the same this year. The country has been among the hardest hit by the drastic slide in oil prices since the summer of 2014.
By Robert Anderson
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