Kuwait inaugural $8 billion bond offer oversubscribed

Kuwait inaugural $8 billion bond offer oversubscribed

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Anas Alsaleh
Anas Alsaleh

RIYADH — Kuwait on Wednesday announced that it has successfully issued its inaugural dual-tranche $8 billion bond offering into the international debt markets.

Notes due in 2022 (the five-year bonds) and for the value of $3.5 billion and notes due in 2027 (the 10-year bonds) for the value of $4.5 billion. The five-year bond was successfully priced on March 13, 2017 at a yield of 2.887%, the 10-year bond with a yield of 3.617% with a spread of 75bps on the five-year Bonds and 100bps on the 10-year bonds respectively, over the relevant US Treasury securities.

The bonds were significantly oversubscribed with 778 investor orders totaling over $29 billion, with strong demand from both international and regional accounts.

The success of Kuwait’s inaugural bond issuance came after a week-long roadshow that covered two continents and four cities including London, New York, Boston and Los Angeles. The Kuwait delegation, led by Anas Alsaleh, Deputy Prime Minister & Minister of Finance of Kuwait, met with over 100 investors and included senior members of the Kuwait government.

Commenting on the issuance, Anas Alsaleh, Deputy Prime Minister & Minister of Finance of Kuwait, said: “We are delighted with the successful pricing of this transaction and the positive response we have received from international investors. This highlights the State of Kuwait’s strong credit standing amongst its international peers.”

“The State of Kuwait has put in place the right policies to ensure that growth and diversification will be maintained in the economy. Furthermore, The State of Kuwait has successfully established large fiscal buffers as a direct result of its ability to efficiently manage oil wealth. This transaction will introduce further diversification to the State’s sources of funding, and establishes a liquid benchmark for Kuwait in the international debt markets.”

The transaction was also successful in achieving a diversified mix in terms of investor type and geography. The final geographic allocation for the five-year bonds was 4% to Asian investors, 46% to European and UK investors, 24% to investors from the Americas and 26% to investors from the Middle East and North Africa (MENA). The allocation for the 10-year Bonds was 4% to Asian investors, 19% to European and UK investors, 51% to investors from the Americas and 26% to investors from MENA.

The final investor types allocation for the five-year Bonds was 22% to banks and private banks, 60% to asset managers and 18% to agencies, pensions and insurance. The final investor types allocation for the 10-year Bonds was 25% to banks and private banks, 68% to asset managers and 7% to agencies, pensions and insurance.

Citigroup, HSBC and J.P. Morgan acted as Global Coordinators for the transaction, and Citigroup, Deutsche Bank HSBC, J.P. Morgan, NBK Capital and Standard Chartered Bank acted as Joint Lead Managers and Joint Bookrunners. — SG

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