International markets renew their confidence in Kuwait... Investors flock to sovereign bonds
Dollar-denominated issuance attracts orders exceeding $18 billion
By Agencies - London: Kuwait attracted investor orders exceeding $18 billion for a dollar-denominated bond issuance yesterday, highlighting the robust demand for the Gulf state’s sovereign debt, which the agency described as “exceptional.”
According to a source familiar with the matter who spoke to “Al-Sharq Bloomberg,” Kuwait intends to borrow from international debt markets for the first time during the war.
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Kuwait sold three-year bonds at a yield spread of 40 basis points over U.S. Treasury bonds, and 10-year bonds at a spread of 50 basis points. The yield spreads in the current issuance may fall below the initial indicative pricing levels, depending on investor demand, according to Bloomberg.
This marks the first time Kuwait has borrowed from general international debt markets since October 2025, according to a source familiar with the matter who spoke to “Al-Sharq Bloomberg.” The move tests investor confidence in the country’s public financial resilience amid daily Iranian attacks and disruptions to oil exports.
The source, who spoke on condition of anonymity, stated that Kuwait plans to issue bonds with maturities of three, five, and ten years. The Ministry of Finance has appointed Citigroup, Goldman Sachs, Standard Chartered, HSBC, and JPMorgan as international coordinators for the issuance.
Kuwait possesses one of the world’s largest sovereign wealth funds, enabling it to maintain a high credit rating since the onset of the conflict despite a sharp decline in oil exports due to its reliance on the Strait of Hormuz. Falling oil revenues led to a sevenfold increase in the budget deficit during the fiscal year ending March 31, reaching $23.4 billion.
The decision to turn to the bond market comes as the country faces repeated Iranian attacks following the collapse of the temporary agreement between the United States and Tehran earlier this month. This has also led to renewed disruptions in navigation through the Strait of Hormuz, just weeks after recovery efforts began.
These disruptions have impacted Kuwait’s international bonds, with prices falling as credit risk costs rose. Nevertheless, the cost increase has remained limited compared to many emerging economies.
Kuwait previously borrowed from the bond market through a private placement in April, according to Bloomberg data. The last public issuance, which typically targets a larger and broader range of investors, dates back to October 2025.
Central Bank Issues $150 Million in Bonds
The Central Bank of Kuwait announced the issuance of treasury bills and the securitization of public debt, on behalf of the Ministry of Finance, in the amount of 150 million dinars.
The Central Bank stated in a press release on its website yesterday that the maturity of the issuance was three years, and it was conducted through a competitive auction with a uniform yield of 2.50%.
The Central Bank’s last issuance took place on June 24, covering four tranches with a total value of 550 million dinars.
