Kuwait Raises $6bln in Bond Sale After Orders Top $14.75bln

Kuwait’s latest sovereign debt issuance raised $6 billion, with investor demand driving the combined orderbook to more than $14.75 billion across the three-tranche issuance.

The $3 billion three-year issuance tightened to 70bps over US Treasuries from IPTs in the +95bps area. The notes were priced at par with a 5.039% coupon and yield. 

The five-year tenor raised $1.5 billion at T+75bps, with a 5.157% semi-annual coupon and yield. IPTs were in the T+100bps area.

The 10-year also raised $1.5 billion at T+85bps, with a 5.509% coupon and yield. IPTs were in the T+110bps area.

At launch, the orderbook crossed $6.75 billion on the shortest tenor, $3.75 billion on the five-year and $4.25 billion on the 10-year, excluding JLM interest.

Citi acted as the billing and delivery bank on the shortest tenor, followed by Goldman Sachs on the five-year and JP Morgan on the 10-year bond.

The trio joined HSBC and Standard Chartered Bank as joint global coordinators, with Citi, Crédit Agricole CIB, Goldman Sachs, HSBC, JP Morgan, Mizuho, SMBC, and Standard Chartered listed as the joint lead managers and bookrunners.

The Kuwait Ministry of Finance, rated A1 (Moody’s), AA- (S&P), AA- (Fitch) (all stable), was the issuer in this latest debt raise, with the senior unsecured notes carrying a similar expected rating.

The notes, which come under Kuwait’s Global Medium Term Note Programme, will list on the London Stock Exchange’s Main Market.

Kuwait, which raised $11.25 billion last October following an eight-year hiatus from international debt markets, was widely speculated to return for another issuance this year, despite recent economic headwinds from the escalating Iran conflict.

The country’s debt law, which gained approval last March, allows the government to borrow up to $99 billion over 50 years to finance budget shortfalls and infrastructure projects. 

(Writing by Bindu Rai, editing by Seban Scaria)