Restructuring of Bond Debt in Kuwait

Kuwaiti companies being issuers of bonds that are due for redemption are presently under duress given that the local securities and real estate markets have turned sour due to the global financial crisis. Such issuers having difficulty making interest and/or principal payments are increasingly considering restructuring their bond debt to avoid calling in a default.

There has been an increasing trend amongst Kuwaiti companies to re-negotiate their debt obligations with existing creditors to provide them with greater confidence evidencing their ability to repay their obligations. This process is carried out pursuant to an overall restructuring of the entire debt of the company.

In Kuwait, most of the debt is being restructured since companies are unable to pay off their debt obligations on time. By adopting a debt restructuring plan, such companies can avoid a default situation on the existing debt.