A BD150 million ($394.9 million) Government Development Bond issue yesterday (July 26) opened to direct subscription through the primary market, Bahrain Bourse (BHB) announced in a statement.

Bahraini and non-Bahraini investors can subscribe to the issue through registered brokers until tomorrow, said a report in the Gulf Daily News (GDN), our sister publication.

Thereafter, investors will be able to trade the bonds in the secondary market at BHB post-listing, which is expected to be on August 16.

The securities have a par value of BD1 with July 30 as the issue date.

They will mature on July 30, 2020.

The annual fixed interest rate on the securities is four per cent, payable every six months on January 30 and July 30 till maturity.

The first coupon payment will be made on January 30 and the last will be on July 30, 2020.

The Government Development Bonds are financial instruments issued by the Central Bank of Bahrain on behalf of the government in order to create new areas for investment of surplus financial resources in the community and fund capital expenditure for various development projects.

The government  directly guarantees the bonds.

One of the main advantages of subscribing through Bahrain Bourse is the ability to own bonds directly (beneficiary ownership).

In order to encourage retail investors, the bourse specified a minimum subscription of BD500 (500 bonds).

BHB has also determined a minimum allotment of 10,000 bonds per subscriber applying for an amount of BD10,000 and above, while the remaining quantity will be allocated on pro rata basis.

This is the first subscription in Government Development Bonds through Bahrain Bourse and follows the success of previous subscriptions in the Government Islamic Lease (Ijarah) sukuk that were issued in January and July. - TradeArabia News Service