‘It is very difficult to predict where the issue will be priced,’ says an international banker. ‘This will be affected by the depth of appetite, the mix of regional and international investors and the reaction of potential investors to Bahrain’s split rating.’

International credit ratings agencies hold differing views of Bahrain. Standard & Poor’sinitiated its coverage of Bahrain with an A- long-term foreign currency rating, the same as its rating for Qatar and several notches higher than the Baa3 issued by Moody’s Investors Servicelast August (MEED 25:10:02). London-based Fitch Ratingson 13 January raised Bahrain’s long-term foreign currency rating to A- from BBB.

‘Bahrain is focusing on its shared rating with Qatar, but institutional investors will probably be taking a broader view,’ says another banker.

The bond roadshow has been taken to Manama, Dubai, Abu Dhabi, Riyadh, Geneva. Zurich, Frankfurt, Paris and London.

Potential investors will be looking at the impact of the bond on Bahrain’s fiscal position. If the final amount subscribed is $500 million, it would represent almost 6 per cent of gross domestic product (GDP). Added to last year’s $600 million sovereign loan, the $255 million and $1,550 million liabilities on financing packages for the Hidd power expansion project and the fifth potline on Aluminium Bahrain, the total increase in the government’s direct and indirect liabilities will have increased by the equivalent of one third of GDP in less than a year.