Finance ministry official says Kuwait Investment Authority will start to look at measures needed to complete offering
Kuwait is still considering the issuance of international bonds worth around 3 billion dinars ($9.90 billion), a finance ministry official told Al Arabiya TV on Monday.
Like other Gulf Arab states, Kuwait is turning to debt capital markets to raise money as oil prices remain at less than half their levels two years ago. Qatar in May sold $9 billion of Eurobonds, while Saudi Arabia completed a record-breaking $17.5 billion debut offering last week.
However, sources told Reuters earlier this month Kuwait's planned bond had been postponed until 2017 after authorities decided it was in no rush to raise funds overseas.
Speaking to the television channel on Monday, Finance Ministry Undersecretary Khalifa Hamada said the country's sovereign wealth fund, the Kuwait Investment Authority (KIA), would start to look at the measures that needed to be taken to complete an offering at the end of October.
"We will look at the economic feasibility and the cost on the country for the issuance, as it is very important to take this into consideration," Hamada said.
He added that the country hadn't yet begun engaging with international banks about the bond because the KIA was still preparing the technical and legal frameworks for the deal.
Kuwait has been granted some financial leeway by a pick-up in oil prices, after they touched a 12-year low in February.
The move has been pronounced since Sept. 27, when the Organization of the Petroleum Exporting Countries announced plans to curb production for the first time in eight years, to rein in a global crude glut that has halved prices from mid-2014 highs above $100 a barrel.
"Until the first half of this fiscal year at the end of September, the deficit reached around 3.6 billion dinars and (the full-year deficit) is expected to be lower than estimated in the budget due to the slight rise of oil prices," Hamada told the channel.
Kuwait's finance minister, Anas al-Saleh, said in July that the country's projected deficit for this fiscal year was 9.5 billion dinars.
Saleh said at the time the shortfall would be covered through drawdowns of reserves as well as issuing bonds both internationally and locally, with the latter debt worth around 2 billion dinars.
"A big chunk" of that figure had already been raised by the Central Bank of Kuwait, Hamada said.