Kuwait launches three-part dollar bond offering

Kuwait City: Kuwait has started accepting bids for a three-part U.S. dollar-denominated bond issuance, featuring maturities of 3, 5, and 10 years, according to fixed-income news service IFR.

Initial price guidance has been set at 70 basis points over U.S. Treasuries for the 3-year tranche, 75 bps for the 5-year, and 85 bps for the 10-year portion.

Citigroup, Goldman Sachs, HSBC, JPMorgan, and Mizuho are acting as joint global coordinators, lead managers, and bookrunners for the offering. The benchmark-sized senior unsecured bonds are being issued under the State of Kuwait’s Global Medium Term Note Programme. Benchmark size typically refers to offerings of at least $500 million.

This marks Kuwait’s return to the international bond markets after an eight-year hiatus. In March, the Kuwaiti cabinet approved long-awaited legislation enabling the country to resume global debt issuance, following years of political delays.

According to the International Monetary Fund, Kuwait’s debt-to-GDP ratio remains under 10%, but is projected to rise to around 25% by 2030 as the government borrows to cover fiscal deficits—still modest compared to most sovereign issuers.

Read More: Kuwait opens bidding for construction of three cities to ease housing crunch

Earlier, Kuwait’s government on Sunday invited local and international companies to take the first step in bidding for contracts as part of its plans to develop three new cities to help tackle a shortage of housing in the oil-rich country.

The project to build the new cities, which will cover more than 300 hectares (740 acres) in total, is the first to be implemented under a new real estate development law that opens Kuwait’s housing sector to private investment.

Oil-rich Kuwait is struggling to meet housing demand among its 1.5 million citizens, and 100,000 people are currently on a government waiting list for a home, with some waiting years.