November 29, 2016 / 9:06 AM / in a year

UPDATE 1-State of Kuwait sends request for proposals for bond

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By Robert Hogg

Nov 29 (IFR) - The State of Kuwait has sent a request for proposals for a potential debut international bond, according to sources.

The sovereign is expected to issue next year, most likely in the US dollar market, continuing the spree of Gulf sovereign bond deals.

In October, bankers said that Kuwait was in no rush to fund overseas, according to Reuters. Finance Minister Anas al-Saleh had said in July the government planned to sell as much as US$10bn in conventional and Islamic bonds in international markets to help plug Kuwait’s budget deficit for the current fiscal year, which will end on March 31.

Several Gulf sovereigns have sold bonds in the international markets this year, led by Saudi Arabia’s record breaking US$17.5bn triple-tranche offering in October.

Other notable deals from Gulf sovereigns in 2016 include Oman’s return after a 20-year absence, Qatar’s US$9bn trade and Abu Dhabi’s US$5bn transaction.

Kuwait, however, will be a new name for investors, though corporates and banks from the country have outstanding US dollar bonds.

This year holding company Kipco printed a US$500m 2023 bond at a yield of 5% in March, while Burgan Bank printed the first ever senior US dollar deal from a Kuwaiti bank in September. Burgan, Boubyan Bank and National Bank of Kuwait also have outstanding subordinated bonds.

Timing for the sovereign’s debut issuance remains unclear. Kuwait is rated Aa2 negative/AA stable/AA stable.

Reporting by Robert Hogg; editing by Alex Chambers and Sudip Roy

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