“Issuance taps into the deep pool of Sharia-compliant financing” says company’s Group CFO

KIPCO – Kuwait Projects Company (Holding) – announced the successful completion of its first Sukuk issuance of KD 103.1 million (US$ 335.8 million). This issuance is the first ever KD denominated Sukuk transaction by a Kuwait incorporated corporate.

The trust certificates in Sukuk format were issued by Kuwait Projects Company Sukuk Limited, incorporated in Cayman Islands as an exempted company with limited liability, with KIPCO as the obligor. This is the first issuance under KIPCO’s US$ 2 billion Trust Certificate Issuance Program.  

The certificates have a six-year tenor. Floating Rate Certificates accounted for 36% of the total issuance, at KD 37.05 million (US$ 120.7 million). The initial profit rate for these certificates was set as 7% per annum (i.e. 3% over the Central Bank of Kuwait Discount Rate; provided that the floating rate profit shall never exceed 7.5%). The Fixed Rate Certificates offer 6.5% profit per annum and their total issuance amounted to KD 66.05 million (US$ 215.1 million).

The proceeds from the issuance will be used for general corporate purposes. The certificates are Sukuk of Murabaha and Wakala, denominated in Kuwaiti Dinars and approved by the Sharia Advisor. The certificates will be listed on the International Securities Market of the London Stock Exchange.  KFH Capital, Kamco Invest and Warba Bank acted as joint lead managers and placement agents of the transaction.

Commenting on the transaction, Mr Sunny Bhatia, KIPCO’s Group Chief Financial Officer said:

“This issuance represents a landmark transaction, being the first ever KD denominated Sukuk transaction by a Kuwait incorporated corporate.  We are excited to be tapping into the deep pool of Sharia-compliant capital and contributing to its development in Kuwait. The transaction reflects the continued success of our proactive liability management initiatives aimed at raising long-term financing, extending the tenor of our existing liabilities to strengthen KIPCO’s capital structure and aligning the liabilities profile with our investment holding strategies.”

He added:

“We would like to thank the Kuwait Capital Markets Authority, our investors and our joint lead managers – KFH Capital, Kamco Invest and Warba Bank – for their support and continued confidence in KIPCO’s capital markets initiatives.”