Steady stream of Gulf dollar bond sales continues

Oman and, for the first time, Kuwait are expected to sell dollar bonds in the coming weeks, continuing the raft of issuances from the Gulf countries over the past year. Kuwait’s strong balance sheet means that it should be able to sell debt at low yields compared with its neighbours, while Oman’s bond sale will help to ease fears of a devaluation of the rial. Oman is expected to return to international bond markets to issue US$2bn of debt this week. It’s unclear what the yield on the bonds will be. But for what it’s worth, yields on Oman’s current international bonds are broadly in line with the rates seen at the time of their last issues in mid-2016. Meanwhile, Kuwaiti officials will meet investors in early March ahead of its inaugural international bond sale, which is expected to be in the region of US$10bn. Given the country’s strong balance sheet, even by Gulf standards, we think that Kuwait should be able to sell debt at relatively low yields compared with its neighbours.