ABK completes KD 50 million bond issuance
KUWAIT: Al Ahli Bank of Kuwait (ABK) has achieved a new milestone with the successful issuance of KD50 million Subordinated Tier 2 Bonds, set to mature over a 10-year period and callable after 5 years.
Abdulla Al Sumait.
This endeavor is anticipated to fortify ABK’s capital base and propel the bank forward while leveraging on the strength of the Kuwaiti economy. Jointly led by ABK Capital, Kamco Invest, and Kuwait Financial Centre “Markaz”, the bond issuance garnered exceptional interest, oversubscribed by 2.2 times.
This overwhelming response underscores the trust placed by investors in the quality of the offering, the venerable reputation of the Bank, and the efficacy of the joint distribution by the lead managers. The bond comprised two tranches: a Fixed Rate Tranche and a Floating Rate Tranche, each with a principal amount of KD 25 million.
The Fixed Rate Tranche offers coupons at 6.25% per annum, while the Floating Rate Tranche offers a coupon rate of2.25% above the CBK Discount Rate. Capital Intelligence have conferred a ‘BBB’ rating with a stable outlook on ABK’s Subordinated Tier 2 bonds, acknowledging the Bank’s strong credit fundamentals, including high asset quality, robust coverage ratios, satisfactory capitalization, and an adequate liquidity and funding profile supported by a stable customer deposit base.
Commenting on the occasion, Abdulla Al Sumait, Acting Group Chief Executive Officer at ABK, said, “This accomplishment is a testament to the confidence investors have in ABK and our commitment to sustained growth and innovation. It highlights our commitment to maintaining a strong capital base and furthering our strategic initiatives. We are grateful for the significant response received and look forward to utilizing this capital to drive our growth and support the development of Kuwait’s dynamic financial landscape.”
Dr Husayn Shahrur, CEO of ABK Capital, said, “I am pleased with the resounding success of the Subordinated Tier 2 Bonds issuance, which follows ABK’s significantly oversubscribed rights issue earlier this year that we also participated in. These extremely well received issuances area reflection of the market confidence in ABK’s consistent performance. This achievement will undoubtedly bolster our growth strategy and support ABK’s objectives.”
He added, “ABK Capital strives to continue building on its presence as a prominent and reputable investment company in Kuwait, and intends to leverage and enrich its clients’ investment journey and aims to build even stronger long-term ties with them, through global partnerships and innovative investment solutions.” Faisal Sarkhou, CEO of Kamco Invest, said, “We take pride in our engagement in the Bank’s two capital market transactions this year; the rights issue that was oversubscribed by 3.31 times during the third quarter along with this bond issuance.
These milestone transactions reflect the resilience of ABK and demonstrate the confidence in both Kuwait’s economic prospects and its banking sector. Our role as investment bankers in efficiently managing such transactions is vital for the growth of the capital markets in Kuwait and the MENA region. We are grateful for the hard work of our Debt Capital Markets teams in this transaction as well as the collaboration of the Joint Lead Managers.”
Ali Khalil, CEO of Kuwait Financial Centre “Markaz”, said: “As we complete yet another bond issuance, we are pleased that the transaction has received great attention from investors in view of the excellent reputation of ABK and the professional expertise of Markaz and the other lead managers. We value our solid relationship with ABK and we seek to maintain and reinforce this relationship through the continuous cooperation between us.
Markaz assisted a number of local companies from various sectors in issuing bonds and sukuk to obtain financing required to support its businesses through our Investment banking team of highly qualified professionals with extensive experience, outstanding technical execution capabilities, and in-depth industry knowledge that enables us to continue serving the needs of capital market players, businesses, and investors.” In closing, Al Sumait said, “We extend our gratitude to the Central Bank of Kuwait, the Capital Markets Authority (CMA), and our joint lead managers – ABK Capital, Kamco Invest, and Markaz – for their instrumental role in the successful completion of this transaction.”
