DUBAI: Bahrain plans to issue a sovereign bond by the summer, its central bank said yesterday, a sign that the country is confident it can draw international investors.

"Bahrain plans to issue a sovereign bond, with the issue size and tenor to be announced later," a Central Bank of Bahrain spokesperson said.

The debt will be issued under a regulatory framework allowing investment by institutions in the US as well as by other investors globally.

The central bank did not provide more details.

Bahrain has mandated four banks for the bond issue, three sources familiar with the matter said yesterday.

The kingdom has selected JP Morgan, Standard Chartered, Citigroup and Gulf International Bank for the sovereign bond. The bond will be a conventional issue and not an Islamic one, two of the sources said.

"There's a lot of liquidity out there chasing emerging market debt, and specifically emerging market sovereign debt," said one regional banker.

IFR Markets, a unit of Thomson Reuters, said earlier yesterday that Bahrain planned to sell a $1.25 billion bond with a maturity of seven or 10 years, no later than the second week of June.

A senior government source told Reuters in April that a bond was not imminent despite the requests to banks, adding that Bahrain was a regular issuer and that the situation in the kingdom would not negatively influence investor appetite. Last November, Bahrain drew $1.8bn in demand for a $750 million, seven-year sukuk, its first sovereign issue since March 2010, pricing it to yield 6.273 per cent. The order book was made up mainly of Middle East investors, helped by its Islamic structure.

If the size and timing of the new bond is confirmed, it would take the state's borrowing to $2bn in just over six months.