Bahrain Raised $1 billion Loan to Repay Bond Last Month: Sources
2020-04-20 - 9:33 p
Bahrain Mirror- Reuters: Bahrain secured a loan of about $1 billion to repay a bond that was due at the end of March, three sources familiar with the matter said, after the Gulf state suspended plans to issue international debt due to bad market conditions.
The small Gulf oil producer, rated junk by all the three major credit rating agencies, obtained the loan last month from a group of local and international banks and used it to repay $1.25 billion in bonds that matured on March 31, the sources said.
A spokesman for the ministry of finance did not immediately respond to a request for comment.
Bahrain was bailed out with a $10 billion financial aid package by some of its wealthier regional allies in 2018 as it was headed towards a credit crunch.
Sources told Reuters in March that the country was in talks with lenders for a loan after it suspended plans to issue international bonds amid market volatility caused by the new coronavirus pandemic and plunging oil prices.
On April 1, the ministry of finance and national economy announced it had repaid the $1.25 billion bonds.
"The successful repayment demonstrates the strength and robustness of the Kingdom's Fiscal Balance Program," it said.
Bahrain has said it wants to deliver a balanced budget by 2022 as part of a programme of fiscal reforms linked to the $10 billion financial aid package received in 2018 from Saudi Arabia, Kuwait and the United Arab Emirates.
The government could post a fiscal deficit of 15.7% of GDP this year from a 10.6% deficit in 2019, according to the International Monetary Fund, while the economy could contract by 3.6%. The IMF expects growth to bounce back to 3% in 2021.