Markaz closes 5-year KD 25 mln bonds issue – Demand exceeds offered bonds, emphasizing investors’ trust

Photo from the event

KUWAIT CITY, Dec 26: Kuwait Financial Centre “Markaz” and Gulf Bank announced in a joint statement the successful completion of “Markaz” 5 years bond issue with a nominal value of KD 25 million, which was oversubscribed.

This extensive demand reflects the investors’ trust in “Markaz”, the quality of the issue, and the high creditworthiness of “Markaz,” in addition to the effectiveness of the joint distribution efforts with Gulf Bank. “Markaz”, the Issue Manager, has appointed Gulf Bank as the Financial Advisor and Sales Agent.

The bonds are issued in two tranches, one with a fixed interest rate of 5 percent annually payable quarterly, while the other tranche offers a floating interest rate of 2.25 percent above the Central Bank of Kuwait discount rate, annually and payable quarterly.

It is worth noting that these bonds, due in 2021, are issued in Kuwaiti dinar and enjoy a credit rating of (BBB) from Capital Intelligence. The credit rating reflects the diversity of “Markaz’s” investment assets and the good level of liquidity, in addition to the decrease of the leverage level, and the good flow of revenues from commissions, administrative fees, direct and indirect investments.

Manaf Alhajeri, “Markaz” CEO, said: “We are pleased to issue the new bonds, which represent the third issue of ‘Markaz,’ reflecting the trust of the capital markets in the quality of Markaz’s issues. The extensive participation of corporate investors in this new issue confirms this trust again in ‘Markaz,’ and reflects the suitable pricing. We hope in light of these positive signs that corporate efforts in both the public sector and private sector will continue to create a strong and deeply established bonds market.”

Alhajeri added: “We cherish our strong relationship with Gulf Bank as financial adviser and selling agent, and we seek to maintain and reinforce this relationship through the continuous cooperation between us. We entrusted Gulf Bank with this role in this issue, and also the one preceding it, in view of the strong market position it enjoys as well as our confidence in the potentials of its distribution network. Gulf Bank is a leading financial institution with a strong network of branches. We are confident that our agreement with the bank is essential to reach a wider base of Investors.”

Meanwhile, Antoine Daher, CEO of Gulf Bank said: “We are pleased to have played an active role in successfully closing the Markaz bond issuance. The issue was well received by the investors and was oversubscribed due to the excellent reputation of ‘Markaz’, the distinctive conditions of the bonds, as well as the outstanding distribution capabilities of Gulf Bank. We have offered both our institutional and private banking clients the opportunity to subscribe in these bonds. Finally, we believe that we achieved a significant milestone for Gulf Bank by adding this issue to the extensive set of diversified investment products offered to our clients.”

The international credit rating company “Capital Intelligence” affirms the credit rating of “Markaz” bonds at the (BBB) investment grade with a stable outlook. It stated in its report that the transformation in the assets diversity away from the most fluctuating financial markets towards the relatively stable real estate sector is a factor for supporting the stabilizing of the rating. Furthermore, the rating reflects the strength of the brand, the conservative business model and good reputation of the company.


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