State of Kuwait $8 billion two tranche sovereign bond issue

Overview:

• The State of Kuwait issued the country's first international bond, selling $8 billion in Reg S/Rule 144A notes in two tranches under a recently established GMTN programme. 
• The tranches, which are listed on the Irish and London stock exchanges, were $3.5 billion 2.75% notes due 2022 and $4.5 billion 3.5% notes due 2027. 
• Kuwait will use the proceeds of the bond to fill a budget deficit caused by lower than usual revenue from oil and gas sales. 
• Recently it has become common for fossil fuel reliant Gulf states like Kuwait to use the debt markets to cover gaps in budgets caused by low energy prices.
• Other recent Middle East sovereign international debt issues include Saudi Arabia's record $17.5 billion debut and Oman's $5 billion bond.
• Citigroup, HSBC and JP Morgan were arrangers on the Kuwait's GMTN programme and joint lead managers on its bond issue. 
• Deutsche Bank, NBK Capital, and Standard Chartered Bank were dealers on the programme and also joint lead manager on the issue. 

Ben Naylor - Regional editor

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