Kuwait has extended the recent run of mega-debt issues in the Gulf with a debut sovereign bond sale that attracted more than $20bn of investor bids.
The $3.5bn 5-year and $4.5bn 10-year bonds have been sold at a yield of around 2.8 per cent and 3.6 per cent respectively.
Kuwait timed its bond debut ahead of a US Federal Reserve meeting on Wednesday at which policymakers are expected to raise US interest rates – a move that could spark a rise in global bond yields, making it more expensive for governments to borrow.
Like other oil-rich Gulf Cooperation Council states, Kuwait has turned to debt markets to fill a budget deficit opened by falling commodity prices.
Last year, Saudi Arabia’s debut on international bond markets last October broke records when it drew $67bn of demand for a $17.5bn sale – the largest debt issue by an emerging economy.
It is thought to be finalising plans to issue new debt, structured as an Islamic bond, in the next few weeks.
Kuwait’s debt sale was led by Citi, HSBC and JPMorgan, with assistance from Deutsche Bank, NBK Capital and Standard Chartered.