Kuwait’s government has transferred the last of its performing assets to the country’s sovereign wealth fund in exchange for cash to plug a monthly budget deficit of $3.3 billion, a person familiar with the matter said, leaving one of the world’s richest nations with few options to pay its bills.
Fitch on Wednesday cut Kuwait’s outlook to negative from stable, citing “the imminent depletion of liquid assets” in the absence of parliamentary authorization for the government to borrow.” The rating was affirmed at AA.
The assets include stakes in Kuwait Finance House and telecoms company Zain, the person said, asking not to be named because the information is private. State-owned Kuwait Petroleum Corp. was also transferred from the government’s treasury to the $600 billion Future Generations Fund, meant to safeguard the Gulf Arab nation’s wealth for a time after oil. KPC has a nominal value of 2.5 billion dinars ($8.3 billion), the person said.
The Finance Ministry declined to give details about the swaps.
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