Kuwait’s parliament is likely to approve a law to extend the country’s borrowing limits, enabling 30-year debt issues, a senior finance ministry official said on Tuesday.
The law would allow Kuwait to increase its debt ceiling to KD25bn ($83bn) from KD10bn currently. It would also allow the Gulf state to issue debt instruments with maturities of up to 30 years, from a current limit of 10 years.
“We’re optimistic that the parliament will pass the law as it is, it’s a matter of getting it though the process,” Abdulaziz Al-Mulla, head of the debt management department at the ministry of finance, said during a Euromoney conference.
Kuwait issued a debut $8bn international bond in March with maturities of five and 10 years. The government decided to extend its borrowing limit to 30 years after noting interest from pension and insurance funds for long-term paper when the bond sale was presented to international investors, said Al-Mulla.
“We believe time is a very important aspect, as we need to finance this fiscal year, from the beginning of April to the end of March 2018, and as we all know there are windows in the market,” he added, without specifying when a new bond issue is likely.
Kuwait is also working on a law that would allow the sovereign to issue sukuk, said Al-Mulla, adding he did not know when such a law would be in place. The current legal framework does not allow the government to raise financing through Islamic bonds.