Central Bank of Bahrain
  

Issuance of Govt Securities

The Central Bank of Bahrain and Financial Institutions Law 2006 (`CBB Law') empowers the CBB to issue debt securities on behalf of the Government of the Kingdom of Bahrain (Article 4). The issuance of government debt securities is executed in coordination with the Ministry of Finance. The issuance calendar for government debt securities is published annually in advance, in the form of an issuance calendar.

At present, the following government debt securities are issued through the CBB Scripless Securities Settlement System (SSSS).  This system handles the Government securities auctions, settlements and provide securities depository for the members. 

 

Treasury Bills (Bahraini Dinar)

• Three-month (91 days) treasury bills are issued on a weekly basis. The issue amount is 45 million Bahraini Dinars.

• Six-month (182 days) treasury bills are issued on a monthly basis. The issue amount is 30 million Bahraini Dinars.

• Twelve-month (364 days) treasury bills are issued on a quarterly basis. The issue amount is 150 million Bahraini Dinars.

• The treasury bills are issued through a variable-rate auction procedure where all eligible retail banks, the Social Insurance Organization and other central banks are invited to participate.. The auction procedure is executed as follows:

• The CBB notifies all eligible participants about the forthcoming issue.  
• Tenders are then allotted according to price/yield until the issue amount is exhausted.

• The CBB notifies the participating institutions about the individual result of the tender allotment.

• The CBB issues a press release with information about the allotment result, including the issue number, issue date, maturity date, amount allotted, lowest accepted price and average interest rate.

The settlement of the resulting transactions takes place through the debiting of the participating banks - accounts with the CBB. The issue date is normally two business days after the tender date.

• The CBB offers depository and settlement services for the holders of government securities. The treasury bills are eligible as collateral for repo transactions with the CBB, i.e. commercial banks can borrow funds from the CBB overnight against their holdings of treasury bills as collateral.

Government Development Bonds (Bahraini Dinar)

• Government Development Bonds are long-term securities denominated in U.S. dollar or Bahraini Dinars. They are issued on an ad hoc basis and have a maturity of 3 to 10 years.

• Government Development Bonds are issued through a fixed-rate tender procedure where all domestic retail banks, the Social Insurance Organization, the national Insurance Company and other central banks are invited to participate. The auction procedure is executed as follows:

• The CBB issues a press release prior to the tender procedure in order to announce details of the Government Development Bond issue, including size, maturity, coupon rate, payment dates, minimum denominations and eligible parties.

• Invitation letters including details on the forthcoming issue are circulated to the institutions entitled to participate in the tender.

• The institutions submit a tender bid to the CBB indicating the quantity they would like to acquire.

• Tenders are then allotted pro rata to interested institutions according to their quantity contributions.

• The CBB notifies the participating institutions about the individual result of the tender allotment.

• The CBB issues a press release with information about the allotment result, including, issue number, issue date, maturity date, amount allotted, coupon rate, payment frequency and total tenders received. This information is also posted on the CBB pages on Reuters and Bloomberg.

• The settlement of the resulting transactions takes place through the debiting of the participating banks - accounts with the CBB.

Al Salam Sukuk (Bahraini Dinar)

• Al Salam Sukuks are a BHD-denominated debt instrument issued in accordance with Sharia standards. Al Salam Sukuks are issued on a monthly basis and have a three-month (91 days) maturity. The issue amount is BHD36 million.

• Al Salam Sukuks are issued through a fixed-rate tender procedure where all eligible financial institutions are invited to participate. The auction procedure is executed as follows:

• The CBB notifies all eligible participants about the forthcoming issue.

• The institutions submit a tender bid to the CBB indicating the quantity they would like to acquire.

• Tenders are then allotted pro rata to interested institutions according to their quantity contributions.

• The CBB notifies the participating institutions about the individual result of the tender allotment.

• The settlement of the resulting transactions takes place through the debiting of the participating banks - accounts with the CBB. The issue date is normally two business days after the tender date.

• The CBB issues a press release with information about the allotment result, including the issue number, issue date, maturity date, amount allotted, expected return and total tenders received. This information is also posted on the CBB pages on Reuters and Bloomberg.

Short Term Ijara Sukuk (Bahraini Dinar)

• Ijara Sukuks are a BHD-denominated leasing instrument issued in accordance with Sharia standards. Short Term Ijara Sukuks are issued on a monthly basis and have a six-month (182 days) maturity. The issue amount is BHD 20 million.

• Short Term Ijara Sukuks are issued through a fixed-rate tender procedure where all domestic retail banks, the Social Insurance Organization and other central banks are invited to participate. The auction procedure is executed as follows:

• The CBB notifies all eligible participants about the forthcoming issue. .

• The institutions submit a tender bid to the CBB indicating the quantity they would like to acquire.

• Tenders are then allotted pro rata to interested institutions according to their quantity contributions.

• The CBB notifies the participating institutions about the individual result of the tender allotment.

• The CBB issues a press release with information about the allotment result, including the issue number, issue date, maturity date, amount allotted, expected return and total tenders received. This information is also posted on the CBB pages on Reuters and Bloomberg.

• The settlement of the resulting transactions takes place through the debiting of the participating banks - accounts with the CBB. The issue date is normally two business days after the tender date.

Long Term Ijara Sukuk

• Ijara Sukuks are a leasing instrument issued in accordance with Sharia standards. Long Term Ijara Sukuks are denominated in U.S. Dollar or Bahraini Dinars. They are issued on an ad hoc basis and have a maturity of 3 - 10 years.

• Long Term Ijara Sukuks are issued through a fixed-rate tender procedure where all domestic retail banks, the Social Insurance Organization, the national Insurance Company and other central banks are invited to participate. The auction procedure is executed as follows:

• The CBB issues a press release prior to the tender procedure in order to announce details of the Long Term Ijara Sukuk issue, including size, maturity, rental return, payment dates, minimum denominations and eligible parties.

• Invitation letters including details on the forthcoming issue are circulated to the institutions entitled to participate in the tender.

• The institutions submit a tender bid to the CBB indicating the quantity they would like to acquire.

• Tenders are then allotted pro rata to interested institutions according to their quantity contributions.

• The CBB notifies the participating institutions about the individual result of the tender allotment.

• The CBB issues a press release with information about the allotment result, including, issue number, issue date, maturity date, amount allotted, expected rental return, payment frequency and total tenders received. This information is also posted on the CBB pages on Reuters and Bloomberg.

• The settlement of the resulting transactions takes place through the debiting of the participating banks - accounts with the CBB.
• The Bahraini Dinar denominated Ijara Sukuks are eligible collateral for Islamic Sukuk Liquidity Instrument (ISLI) with the CBB. I.e. retail banks can borrow funds from the CBB for 1-week against their holdings of Ijara sukuk as collateral.

   2014 Issuance Calendar

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