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Orders Top $1B For Bahrain Mumtalakat Bond Debut

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According to the Wall Street Journal, “Offers for Bahrain Mumtalakat Holding Co.’s first-ever bond issue are in the range of $1 billion to $1.25 billion, according to a source familiar with the sale.

That means the sovereign wealth entity’s debut could be larger than the minimum $500 million benchmark size when it completes on Wednesday. Deutsche Bank, HSBC, JPMorgan and Standard Chartered are leading the sale.

The five-year senior unsecured bonds, rated A by Standard & Poor’s and A from Fitch Ratings, are expected to yield 300 basis points over mid-swaps. Proceeds will be used for general corporate purposes, including to refinance existing debt.

The Kingdom of Bahrain, which owns Mumtalakat outright, issued $1.25 billion in 5.5% bonds on March 24 via JPMorgan, Deutsche Bank and BNP Paribas, according to Dealogic.  In a note on June 21, Standard & Poor’s said there is an “almost certain likelihood that the government of Bahrain would provide timely and sufficient extraordinary support to Mumtalakat in the event of financial distress,” although it does not formally guarantee its liabilities.

Mumtalakat does not make material investment decisions without government consent, S&P added. Most of the company’s assets are in domestic real-estate, telecommunications, aviation, banking and manufacturing. Bahrain owns a separate holding company for oil and gas assets, the National Oil and Gas Authority.  The issuer’s decision to tap the capital markets for the first time was predicated on the Mumtalakat’s need to become more independent from Bahrain, said the source.

“In the wake of the Dubai World issues, Bahrain is trying to push these sovereign entities away from its balance sheet and would like them to fund themselves on their own,” the person said.”

Source: Wall Street Journal

Saudi Aramco and PIF See Opportunities in Russia

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Saudi Arabia’s Public Investment Fund (PIF) is currently exploring opportunities within Russia. PIF is working with the Russian Direct Investment Fund (RDIF) on a number of fronts. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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HNA Group Aims to Shrink and Sell

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Chinese conglomerate HNA Group is on a selling spree due to an order from the government in Beijing to scale back on debt. HNA Group joins Anbang Insurance Group and Dalian Wanda Group in deleveraging from global assets, particularly in hotels and real estate. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Central Bank of Hungary Buys Mounds of Gold

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In October, the Central Bank of Hungary (MNB) boosted its gold reserves by 10 times, from 3.1 tons to 31.5 tons. This was revealed on October 16, 2018. The gold acquired by the central bank in October has a holding value of US$ 1.24 billion.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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