Kuwait’s debut Eurobond offering, after an eight-year hiatus, raised $11.25 billion through three tranches.

Strong international demand totalling over $20 billion enabled significant price tightening across all tenors. From a capital markets perspective, Kuwait’s successful return highlights renewed investor appetite for Gulf state debt. The three-tranche structure attracted diverse geographical participation, particularly from American, European, and regional MENA investors. Furthermore, the Ministry of Finance strategically tightened pricing significantly from initial guidance levels.

 

The three-year tranche raised $3.25 billion at 40 basis points over US Treasuries with a 4.016% coupon. Initially, the deal was marketed at T+70, demonstrating strong market reception. American investors dominated this shorter tenor with 38% participation, whilst MENA investors contributed 34%.

 

The five-year tranche generated $3 billion at T+40bps, tightened from the initial guidance of T+75bps. This tranche carried a 4.136% coupon rate with MENA investors leading at 33%. UK and European investors accounted for 27% of demand.

 

The 10-year tranche secured the largest allocation of $5 billion, priced at T+50bps versus T+85bps guidance. This long-dated paper offered a 4.652% coupon rate. European investors showed the strongest appetite at 38%, followed by MENA at 31%.

 

Combined order books exceeded $20 billion excluding joint lead manager interest. The 10-year tenor attracted $12.5 billion in orders, whilst the five-year drew over $6.1 billion. The three-year tranche received $5.1 billion in expressions of interest.

 

Citi, Goldman Sachs International, HSBC, JPMorgan, and Mizuho served as Joint Global Coordinators. Bank of China and Industrial Commercial Bank of China acted as Passive Joint Lead Managers. The notes will trade on the London Stock Exchange’s Main Market.

 

Kuwait’s credit ratings support the issuance with A1 from Moody’s, A+ from S&P, and AA- from Fitch. The bonds fall under Kuwait’s Global Medium Term Note Programme. The three-year note matures in October 2028, the five-year in 2030, and the 10-year in 2035.

 

This landmark transaction follows March’s debt law approval, permitting $99 billion borrowing over 50 years. Officials previously indicated potential borrowing of $10-20 billion during 2025-2026 for fiscal requirements.

(Source: Bindu Rai, LSEG)

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