KAMCO, Gulf Bank and NBK Capital advise KIPCO on KWD 100mn issue

08/01/2018 05:13 AST

KAMCO Investment Company, Gulf Bank and NBK Capital acted as Joint Lead Managers for the Kuwait Projects Company (Holding) (KIPCO)'s KWD 100 million, senior unsecured dual-tranche bonds due December 2024.

KAMCO, Gulf Bank and NBK Capital's joint press release highlights the senior unsecured bond issuance, with an issuer's rating of BBB- by Standard & Poor's Rating Services, is the only KWD-denominated corporate bond in 2017 and the first 7 year KWD denominated corporate bond issuance in Kuwait.

The issuance was well received by a wide variety of investors including government, institutional and other professional clients, with an oversubscription rate of over 1.45 times. KIPCO will use the proceeds from the bond issuance for general corporate purposes, providing KIPCO with a diverse investor base and more financial flexibility, which will allow it to continue enhancing earnings and shareholder returns.

The issuance not only represents the only KWD-denominated bond issued in 2017, but also marks the largest KWD issuance by a Kuwaiti Corporate, reflecting KIPCO's credit strength and investment appeal. Faisal Sarkhou, Chief Executive Officer of KAMCO said, "Our role as Joint Lead Managers in successfully issuing KIPCO's senior unsecured bond issuance reaffirms our commitment towards enhancing and supporting the local bond market. We believe that our leadership role and proficiency in managing such debt instruments that strengthen the Kuwaiti and MENA capital markets is essential in stimulating this growing sector. KAMCO will also continue to provide various diverse financial instruments that will benefit both investors and the Kuwaiti economy. I would also like to commemorate our Investment Banking team for their effort and dedication, along with our trusted Joint Lead Managers in this issuance."

Ahmad AlDuwaisan, General Manager of Corporate Banking at Gulf Bank said, "Being actively involved in investment opportunities that bolster the private sector and support the development of Kuwait's economy is of great importance to Gulf Bank. As a Joint Lead Manager in KIPCO's KWD 100 million bond issuance, we were pleased to deliver the best possible outcome for our client and consider this another significant step in strengthening Kuwait's capital markets. Gulf Bank looks forward to continuing to structure and manage new bond issuances."

Faisal Al-Hamad, Chief Executive Officer of NBK Capital said, "We are very proud to have advised KIPCO on this exciting mandate. This issuance represents a landmark transaction that will serve as a vital benchmark for upcoming corporate issuances in Kuwait. The success of this transaction was achieved through the support provided by the Kuwait Capital Markets Authority and our team of dedicated professionals who continually strive to exceed client expectations while enhancing the local debt capital market. I would like to thank KIPCO for providing us with this exciting opportunity and we look forward to maintaining the trust of our clients and investors."

The dual-tranche bonds were priced competitively, as the Bonds are comprised of two tranches; Fixed and Floating. The Fixed Rate Tranche coupons are fixed at 5.25 percent per annum payable semi-annually in arrears.

The Floating Rate Tranche coupon rate is equal to CBK Discount Rate + 2.25 percent payable semi-annually in arrears (and not exceeding 6.25 percent). KAMCO, Gulf Bank and NBK Capital would like to extend their appreciation and gratitude to Capital Markets Authority and KIPCO for their joint commitment and support towards the local institutions. In addition to the mentioned entities, investors also played a crucial role in the bond transaction's success.

Arab Times