Kamco & Gulf Bank issue largest KWD dominated corporate bond

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KWD165 mn bond issued for KIPCO Group

Abdullah AlSharekh and Hani Al Awadhi

KUWAIT CITY, Jan 3: Kamco Invest and Gulf Bank announced the successful completion of the KWD165 million bond issuance for Kuwait Projects Company (Holding) KIPCO, the largest KWD denominated corporate bond ever issued.

Jointly managed by Kamco Invest and Gulf Bank, the bond comprises of two tranches, a fixed rate and fl oating rate tranches,with a tenure of 6 years. The KWD55.15million Fixed Rate tranche offers a coupon of 6.75%, whereas the KWD 109.85million Floating Rate trancheoffers a coupon rate of 3.00% above the Central Bank of Kuwait’s discount rate with a cap of 7.75% per annum.The coupon on both tranches will be paid semiannually, with first payment commencing end of June 2023. Kamco Invest acted as a financial advisor to KIPCO in structuring the terms and coordinating with the regulators and various related parties.

On this occasion, Abdullah M. AlSharekh, Managing Director of Markets and Investment Banking at Kamco Invest said, “This transaction marks yet another milestone that will pave the path for additional issuances to strengthen the local and regional debt capital markets. KIPCO’s financial position, vision, and strong track record in utilizing the debt capital markets have helped in attracting strong investor appetite.”

AlSharekh Added, “Despite it being the largest KWD denominated corporate bond, the KWD 165 million transaction was completed seamlessly and in a short period of time.We value the role our investment banking team is consistently undertaking in key transactions and putting forth their experience and credibility to deliver the best possible outcome.” General Manager of Investments at Gulf Bank, Hani Al Awadhi, said: “We are pleased to participate as a Joint Lead Manager and Arranger along with Kamco Invest in the successful issuance of the largest KWD denominated corporate bond. He added: “Participation in this transaction has been met with great attention by investors in view of the excellent reputation of KIPCO and the professional expertise of Gulf Bank and Kamco Invest in providing a variety of investment opportunities to the clients.”

Al Awadhi also pointed that “As part of Gulf Bank’s continuous efforts to enhance its pivotal role in activating the local capital market and enhance customer offerings, the Bank is in the final stages of establishing an investment subsidiary and has received preliminary approvals from regulatory bodies for the same. We look forward to managing more capital market transactions through our specialized team, who have spared no efforts in delivering the best possible outcome for all our valued clients.

Transaction
It is worth noting that the bond issuance is the first capital market transaction for KIPCO following the completion of its merger with QPIC end of November 2022. Today, KIPCO is one of the largest holding companies in the MENA region with a balanced income stream and a diversified portfolio of assets that includes petrochemical and oil services, banking, foodstuff, insurance, amongst others. AlSharekh concluded, “On behalf of the joint lead managers, Kamco Invest and Gulf Bank, I would like to thank KIPCO for their confidence in our capabilities, the Capital Markets Authority for their efforts in the successful completion of this issuance. My gratitude also goes to the investors,and the transaction’s legal advisor ASAR who played a crucial role in the bond transaction’s success.”

Investment
KAMCO Investment Company KSC (KAMCO) was established in 1998 as a subsidiary of United Gulf Bank (UGB) – the investment banking subsidiary of Kuwait Projects (Holding) Company, i.e., KIPCO and specialises in asset management and financial services in Kuwait and the Middle East and North Africa (MENA). Having increased its share capital from KD 15 million to KD 20 million in June 2003, KAMCO was listed on the Kuwait Stock Exchange (KSE) in October of the same year. KAMCO’s current capital stands at KD 26.33 million distributed among 263.3 million shares with a par value of 100 fils each. Gulf Bank is one of the largest leading banks in Kuwait with a broad offering of consumer banking, wholesale banking, treasury, and financial services. The Bank was founded in 1960, registered as a bank with the Central Bank of Kuwait and was listed as Gulf Bank (GBK) on the Kuwait Stock Exchange (Boursa Kuwait) in 1984. Gulf Bank has a large network of 58 branches, with total assets of KD 6 billion (US$19.8 billion) for year ended 31 December 2018.

The Bank is currently ranked ‘A’ by four leading international credit rating agencies; a Long-term Issuer Default Rating of “A+” with a “Stable” Outlook by Fitch Ratings, an Issuer Credit rating at “A-/A-2” with a “Stable” outlook by S&P Global Rating, a Long-Term Deposits Rating of “A3” with a “Positive” Outlook by Moody’s Investor Services and a Long-term Foreign Currency Rating of “A+” with a “Stable” Outlook by Capital Intelligence Ratings. Gulf Bank has been recognized with numerous awards, spread over different sectors of its work, including consumer banking, wholesale banking, products, performance, marketing, human resources, and its corporate social responsibility program. Gulf Bank is strongly committed to giving back to Kuwait and society through its Sustainability and corporate social responsibility program. The Bank supports numerous events focusing on youth, education, health and fitness, helping the underprivileged, women’s empowerment, as well as promoting Kuwait’s heritage and culture.

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