The Kuwait Financing and Liquidity Law has today been formally promulgated into law. This landmark legislation provides a new framework for government financing and liquidity management.

Key stakeholders impacted include the Kuwait Ministry of Finance, financial institutions operating both locally and globally, investors in Kuwaiti debt instruments, and various governmental agencies.

• The government is now authorised to borrow up to KD 30 billion (or its equivalent in foreign currencies) over a period not exceeding 50 years.
• The law encompasses conventional financial instruments such as Sukuk, treasury bills, and bonds, alongside other established methods in local and global markets.
• The ability to divide borrowing into independent tranches offers significant flexibility in managing financing needs and accessing markets at opportune times.
• The Ministry of Finance retains a central role in the conclusion, management, and execution of loan contracts and financing operations, with the Minister having significant authority.
• Notably, the issuance, offering, and management of financial instruments under the new Law are exempt from the Kuwait Capital Markets Law.
• The Minister of Finance will determine which instruments issued under this law will be listed on the stock exchange, in coordination with the Capital Markets Authority’s trading rules.
• The Minister can authorise the early redemption of financial instruments and the early repayment of loans if deemed in the public interest.
• The repayment period can extend up to 50 years from the conclusion of the loan or financing (or each tranche).
• The law explicitly permits borrowing for refinancing existing public debt and settling government financial obligations.

ASAR’s deep expertise in the capital markets and banking & finance space positions us uniquely to advise on the implications of this significant financial legislation. You are welcome to reach out to us at any time – we love nothing more than to add value to our clients and their organisations! Your success is our success!