BMA picks bank for Islamic bond issue

The Bahrain Monetary Agency (BMA) has mandated Citi Islamic Investment Bank to arrange a $250 million, five-year Islamic leasing bond issue (Ijara sukuk), which will be launched next month.

The international issue will be the eighth in BMA's Ijara sukuk series.

This will bring the value of Islamic leasing bonds issued by the agency to a total of $980 million, said Waleed Rashdan, executive director of banking operations at the Bahrain Monetary Agency.

The issue will open in November 2003.

"This is not a new borrowing by the government of Bahrain. The upcoming issue is the refinancing of an existing 100 million Bahraini dinar (about $264 million) 30-year conventional bond issue, which was put on the market on February 3, 1999 and matures on February 3, 2029," he explained.

"We have decided to retire the 30-year conventional bond issue and replace it with a $250 million, five-year Ijara sukuk issue. This is being done mainly with the aim of developing the debt capital market in Bahrain."

The upcoming issue is BMA's first international issue, and the second international to be made by Bahrain Government of Bahrain.

The upcoming offering is the second to be made by the Bahrain Monetary Agency through a financial institution. The first six were made directly by the agency.