KIPCO – the Kuwait Projects Company – has announced the successful pricing of a US$ 500 million (KD 141 million) five-year bond issue in the international capital market, the first from the MENA region in 2014.
The deal had substantial demand at launch and was six times oversubscribed, attracting a total of 250 investors from across the Middle East, Europe and Asia. Strong demand allowed the company to price the deal at the tight end of the pricing range with a fixed coupon of 4.80%.
In a volatile market backdrop, KIPCO was able to capitalize on the positive investor feedback and an issuance window of opportunity to swiftly execute an intra-day trade and raise US$ 500 million under its existing EMTN program.
The bonds were widely distributed, with European investors allocated 41% of the issue transaction while Middle East, UK, Asian and US (offshore) investors accounted for 19%, 15%, 14% and 11% respectively. In terms of investor profile, 58% was allocated to fund managers, 33% to banks and 9% to others.
Commenting on this transaction, Mr Faisal Al Ayyar, KIPCO’s Vice Chairman said:
“We are delighted that the KIPCO bond was well received by regional and international investors. The overwhelming response is a testament to our track record of delivering results and our financial discipline. Investors were attracted to the quality of KIPCO’s operating businesses, their strong market position and future growth prospects.”
Mr Pinak Maitra, KIPCO’s Group Chief Financial Officer added:
“Over the years, KIPCO has been a consistent issuer in the international bond market and this deal reflects the positive experience investors had with its previous issues. KIPCO has a high quality and diversified investor base and the bond was priced through its existing yield curve. The bond further diversifies KIPCO’s maturity profile and enhances its financial flexibility to execute our strategy.”
BNP Paribas, HSBC and J.P. Morgan acted as joint bookrunners on the offering.