Kuwait has borrowed from the international capital markets for the first time, closing an $8 billion US dollar deal last week.Aside from a loan during the first Gulf War the State of Kuwait has simply never needed to borrow funds. But much like other Gulf Cooperation Council (GCC) countries, the enduring oil price crash saw the country post its first ever budget deficit in 2016 in 16 years.
The government issued the dual-tranche bonds via a recently established global medium term note (GMTN) programme to allow it to continue tapping the international markets when conditions are suitable. It also established a debt management unit to coordinate the issuance of future external debt.
The bonds are dual-listed on the Irish and London stock exchanges; a popular option for GCC debt.
“In part the government, through the...