KIPCO completes issuance of first 'Sukuk'

KUWAIT, July 5 (KUNA) -- Kuwait Projects Company (KIPCO, Holding) on Wednesday announced the successful issuance of its maiden Sukuk (sharia-compliant bond-like instruments) worth KD 103.1 million (USD 335.8 million).

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 USS two billion Trust Certificate Issuance Program, according to a press release from the company. The certificates have a six-year tenor. Floating Rate Certificates accounted for 36 percent of the total issuance, at KD 37.05 million (USD 120.7 million).
The initial profit rate for these certificates was set as seven percent per annum (i.e. 3 percent over the Central Bank of Kuwait Discount Rate; provided that the floating rate profit shall never exceed 7.5 percent).
The Fixed Rate Certificates offer 6.5 percent profit per annum and their total issuance amounted to KD 66.05 million (USD 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. (Kuwait Finance House) KFH Capital, Kamco Invest and Warba Bank acted as joint lead managers and placement agents of the transaction.
Commenting on the transaction, 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," Bhatia noted.
"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," he added. (end) ak.amh.gb.