Bahrain’s $1bn bond issuance oversubscribed

Bahrain has reportedly raised $1 billion through a new bond issuance, with orders crossing $3.2 billion amid the Iran war.

The funds were raised hours after Bahraini defence forces intercepted and destroyed three missiles and several drones launched from Iran on Wednesday, Bloomberg reported, quoting unidentified sources.

The yield on the 10-year notes — the first sovereign offering from the region since the war began on February 28 — was lowered to 7.125 percent, from the initial guidance of 7.5 percent.

Bahraini bonds came under pressure after the war started, but recovered by mid-April after the UAE provided financial support. The central banks of the two countries signed a currency swap agreement of AED20 billion, or BHD2 billion ($5.5 billion).

The latest notes are likely to be rated “B” by S&P Global Ratings and Fitch Ratings, Bloomberg reported.

The Central Bank of Bahrain moved in April to shield its economy from the fallout of the war, offering a package of loan deferrals and liquidity support for the financial sector.

In December last year, the Gulf state approved fiscal measures intended to boost non-oil revenue and arrest a sharp rise in government debt.

The 11-part fiscal package includes increases in electricity and water rates as well as fuel and natural gas prices for businesses, a new corporate tax and a 20 percent cut in administrative spending.

Data released by the Ministry of Finance and National Economy showed that GDP grew by 3.5 percent in real terms in 2025, driven by a 4.1 percent expansion in non-oil sectors.

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