#Kuwait Starts Its First Sale Of Dollar Bonds in Eight Years - Bloomberg

Kuwait Starts Its First Sale Of Dollar Bonds in Eight Years - Bloomberg

Investor orders for Kuwait’s first international bond sale in eight years have already topped $20 billion, underscoring strong appetite for the OPEC member’s debt.

The country is marketing tranches of three, five and 10 years that are expected to be rated A+/AA by S&P and Fitch, according to a person familiar with the matter, who asked not to be identified. Initial price talk is around 70 basis points over US Treasuries for the shortest tranche and around 85 basis points for the longest one, the person said. Final terms on the size and spreads are expected later Tuesday.

The sovereign’s cabinet in March approved a long-delayed debt law that paved the way for its return to global markets, following years of political deadlock. The state has one outstanding dollar bond, a $4.5 billion note due 2027, which trades at a yield of about 4.3%.

Kuwait, one of the strongest credits in emerging markets, has been plugging budget deficits by drawing on its General Reserve Fund, including selling assets to the Future Generations Fund last year. Both are managed by the Kuwait Investment Authority.

The Gulf state of around 5 million people is the world’s biggest oil producer on a capita basis. It’s rated A1 by Moody’s Ratings, the same level as Japan and China.

Its debt-to-GDP ratio is less than 10%, IMF data show, though the Washington-based lender projects that figure will climb to about 25% by 2030 — still low relative to most sovereign bond issuers — as the country borrows more to cover fiscal shortfalls.

Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co. and Mizuho are managing the sale.