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Bahrain’s oil holding firm launches $750m sukuk

Abu Dhabi North American fund Reuters/Dado Ruvic

Bahrain’s state oil holding firm Nogaholding launched a $750 million 10-year Islamic bond, or sukuk, on Wednesday, capital markets publication IFR News reported. Demand for the high-yield issue drove pricing below guidance.

Order books hit more than $3.75 billion ahead of launch, allowing the company to offer a yield of 6.625 percent from the 7.25 percent initially indicated.

The company said on Monday it would hold investor calls ahead of a possible new sukuk issue under its $3 billion programme but also offered to tender existing notes for cash, conditional on the new debt sale.

Nogaholding is wholly owned by the government of Bahrain, rated B+ by Fitch Ratings. It made a net profit of $1.06 billion last year, up from $466 million in 2021 and a net loss of $130 million in 2020, according to an investor presentation.

Bank ABC, Citi, First Abu Dhabi Bank, HSBC, JP Morgan and National Bank of Bahrain were mandated joint lead managers and joint bookrunners.

Other Gulf issuers have also taken advantage of favourable market conditions and investor demand for Islamic bonds to issue this week. Aldar Investment Properties, a unit of Abu Dhabi’s Aldar Properties, sold a $500 million ‘green sukuk’ on Wednesday.