Kuwait aims to cover budget deficit with $8bn int’l bonds – Agency

Kuwait aims to cover budget deficit with $8bn int’l bonds – Agency
(Photo Credit: Mubasher's Photo Archive)

Mubasher: Kuwait is set to offer 5- and 10-year international bonds worth $8 billion to cover its expected budget deficit of KWD 9.7 billion, news agency Bloomberg reported.

The 5-year bonds are worth $3.5 billion, while the 10-year bonds stand at $4.5 billion, an anonymous source familiar to the offering told the agency.

The pricing of the bonds initially stood at 100 basis points and 120 basis points for the 5-year and 10-year bonds, respectively, but was tightened after bids amounting to $29 billion were generated by the offer, according to the source.

The pricing now stands at 75 and 100 basis points, respectively, Bloomberg added.

Kuwait is not the first oil-dependent country to resort to foreign investors in order to cover its budget deficit, following the examples of Saudi Arabia, Qatar, and Oman last year.

In July, the government had said it may sell as much as $10 billion in global markets in order to cover the deficit.

Kuwait, the fifth largest producer in the Organization of Petroleum Exporting Countries (OPEC), suffered a major budget deficit after oil prices more than halved in June 2014.

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Source: Mubasher