A planned $1 billion Bahrain sovereign bond issue is likely to be delayed by protests, while jittery investors, worried about their exposure, sold off state bonds.

Bahrain's debt insurance costs hit fresh 18-month highs on Wednesday, said a report in our sister publication, the Gulf Daily News.

Bahrain had asked banks to bid on securing the mandate for a proposed sovereign bond issue early this month.

"That process is underway but given everything that's happened in the past three days I'd suspect that will be postponed," said a banker at a bond syndicate desk in London. "I'd be very surprised if they went ahead."

"Bahrain bonds are volatile right now, but it doesn't seem to be affecting other Gulf names. And the CBB sukuk has picked up a little today now that Bahrain is back at work and traders are picking up at the lows," said Wallich & Matthes fixed income sales trader Thomas Christie.

"There are a lot of potential issuers looking to issue both sovereign and corporate but the reality is that after the wobble in Egypt, people felt it would be contained," the banker in London said. – TradeArabia News Service