Kuwait to is­sue bond to cover deficit

The Myanmar Times - - International Business -

KUWAIT will is­sue bil­lions of dol­lars worth of bonds sold on in­ter­na­tional mar­kets to fi­nance a bud­get deficit re­sult­ing from low oil prices.

Fi­nance Min­is­ter Anas al-Saleh said Kuwait will is­sue US dol­lar de­nom­i­nated sov­er­eign bonds of up to US$9.6 bil­lion dur­ing the 2016-17 fis­cal year which ends March 31.

This comes on top of a $6.6 bil­lion do­mes­tic debt pro­gram which is al­ready un­der way.

Kuwait, like other en­ergy-rich Gulf Co­op­er­a­tion Coun­cil (GCC) states, has al­ready taken on tens of bil­lions of dol­lars in for­eign debt to fi­nance bud­get short­falls.

Saudi Ara­bia, Qatar, Oman and United Arab Emi­rates have sold bonds or took syn­di­cated loans to plug their deficits.

The min­is­ter’s de­cree did not spec­ify the share of Is­lamic sukuk bonds in the planned is­sue.

It will be the coun­try’s first for­eign debt in around two decades.

Kuwait recorded a bud­get deficit of $15 bil­lion last fis­cal year, break­ing a 16-year run of sur­pluses.

Oil in­come con­trib­uted around 95 per­cent of pub­lic rev­enues in those years. Dur­ing the past two years, oil has lost around 60pc of its value.

The emi­rate, home to 1.3 mil­lion Kuwaitis and 3 mil­lion for­eign­ers, is also pro­ject­ing a bud­get short­fall of $29 bil­lion this fis­cal year.

Dur­ing sur­plus years, Kuwait piled up around $600 bil­lion in its sov­er­eign wealth fund in hold­ings mostly in the United States, Europe and Asia. –

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