Kuwait Sells 100 Million Dinars of Five Year Debt at a 3.375 Percent Cut-Off With Bids Covering It 3.9 Times
The Central Bank of Kuwait issued 100 million dinars of five year public debt on 19 August at a cut-off yield of 3.375 percent. Bids totalled 387 million dinars, covering the issue 3.87 times.
The instrument is not a fixed coupon bond and the distinction matters. Issue 1358/87 combines treasury bonds and public debt tawarruq in a single operation, and the results sheet records the yield type as floating, set on the rate of the six month CBK bond plus a margin. The 3.375 percent is a cut-off on that floating structure, paid every six months, with maturity on 13 August 2031.
The auction was heavily bid and heavily rationed. Thirty seven competitive orders were submitted and eleven accepted. The lowest accepted yield was 1.938 percent, the median order 3.875 and the highest 4.500. The median submitted yield therefore sat 50 basis points above the 3.375 percent cut-off and the highest 112.5 basis points above it. The Bank filled the issue from the lower priced end of a book almost four times the amount offered, and allotted the full 100 million competitively with nothing non-competitive.
| Kuwait five year issues, 2026 | Size | Cut-off yield |
|---|---|---|
| 11 February | KWD 150m | 3.625% |
| 29 April | KWD 100m | 3.250% |
| 24 June | KWD 100m | 3.250% |
| 29 July | KWD 250m | 3.250% |
| 19 August | KWD 100m | 3.375% |
The five year point has moved 12.5 basis points, and it is a partial retracement rather than a new high. After clearing at 3.250 percent at three consecutive auctions from April through July, the August issue cleared 12.5 basis points higher. That still leaves it 25 basis points below the 3.625 percent of February, so the year’s range at this tenor is 37.5 basis points and the latest print sits in the middle of it. The size is also smaller, at 100 million against 250 million in July.
Domestic money market conditions did not move with it. The discount rate is 3.50 percent and has been unchanged since 11 December 2025. The overnight repo rate is 3.125 percent, one week 3.375, one month 3.625. KONIA, the overnight interbank benchmark, was 2.800 percent on 18 August on volume of 439.961 million dinars. The one year KIBOR is 3.9375 percent. The cut-off on a floating rate instrument and a fixed interbank quote are different measures, so the gap between them is context rather than a spread.
Why it matters: Demand is the cleaner signal from this auction. A 100 million dinar issue drew 387 million of bids and 3.87 times cover, while the cut-off moved 12.5 basis points above the three auctions from April through July and remained 25 basis points below February. Because the instrument resets against the six month CBK bond plus a margin, the 3.375 percent should not be read as a conventional fixed five year sovereign yield, nor as a direct forecast of policy rates. It sits against a discount rate that has not moved in eight months.
Outlook: The five year point has now printed at 3.625, 3.250 three times, and 3.375 across 2026, so the next auction at that tenor establishes whether August was a step up or a single wide print. Boursa Kuwait closes on Thursday 27 August for the Prophet’s Birthday and resumes on 30 August.
Sources: Central Bank of Kuwait, public debt issuance 1358/87 announcement and results sheet, 19 August 2026 · Central Bank of Kuwait announcements archive for the 11 February, 29 April, 24 June and 29 July 2026 issues · Central Bank of Kuwait main indicators, read 19 August 2026, for the discount rate, repo rates, KONIA and KIBOR. The bid to cover ratio, the year’s range at the five year tenor and the comparison with one year interbank pricing calculated by The Edge Research Team.
