KWD165 million bond issued for KIPCO Group

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 floating rate tranches, with a tenure of 6 years. The KWD 55.15million Fixed Rate tranche offers a coupon of 6.75%, whereas the KWD 109.85 million Floating Rate tranche offers 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 semi-annually, 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, Mr. 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.”

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.”