Al Ahli Bank of Kuwait (ABK), as the Issuer, and Ahli Capital Investment Company K.S.C.C “Ahli Capital”, Kamco Investment Company K.S.C.P “Kamco Invest”, Kuwait Financial Centre K.P.S.C. “Markaz”, and Watani Investment Company K.S.C.C. “NBK Capital,” serving as the Joint Lead Managers, announced in a statement the successful issuance of KD50 Million Subordinated Tier 2 Bonds, for a period of 11 years, callable after 6 years, offering a rewarding return for holders of both fixed interest and variable interest bonds. The issuance was oversubscribed, reflecting the investors’ trust in the quality of the issue, the reputation of ABK, and the effectiveness of the joint distribution of the lead managers. This marks ABK’s first Kuwaiti Dinar denominated bond issuance.
The KD25 Million Fixed Rate bonds offer 4% interest, and the KD25 Million Floating Rate bonds provide a margin of 2.25% over the discount rate. The interest will be paid in two instalments annually on the 10th April 2022 and the 10th October 2022, with the first coupon payment date commencing on the 10th April 2022.
ABK’s Subordinated Tier 2 bonds were rated “BBB” (Investment grade) with a stable outlook by Capital Intelligence. The rating reflects the strength of the Bank’s solid capital ratios, good loan asset quality, very strong loss reserve coverage, comfortable liquidity and pro-active and robust risk management.
Commenting on the occasion, ABK’s Group CEO, Mr. George Richani, said: “This transaction has been met with great interest by investors in view of the excellent reputation of all parties involved. ABK’s clear business strategy along with the professional expertise of our lead arrangers, has helped in closing the issuance in a short period. Strong demand from a great number of institutional and individual investors reflects the market’s confidence in the Kuwaiti banking sector in general, and in ABK and all the joint lead managers in particular. We are confident that this issuance will contribute to enhancing ABK’s capital adequacy and support our growth plans.”
Mr. Fawzy Althunayan, Chairman of Ahli Capital, said: “We are pleased to be completing this bond issuance and witnessing such a high level of interest. The success of this transaction is attested to the robust investor demand and further underlines our commitment to paving the way for future issuances that will ultimately strengthen local and regional debt markets. ABK’s solid reputation and clear growth strategy have been a catalyst in closing the bond issuance in record time.”
Mr. Faisal Sarkhou, CEO of Kamco Invest, said: “With great pride, we assist ABK in their inaugural Kuwaiti Dinar denominated bond issuance, which saw strong investor interest and was oversubscribed. The success of the bond issuance is a testament to the collaboration of all parties involved. We are encouraged by the healthy investor response as this is a strong indicator of Kuwait’s positive economic outlook and the investor community’s confidence in the country and the banking sector.”
Commenting on the bond issuance, Mr. Ali Khalil, CEO of Kuwait Financial Centre (Markaz), said: “Our collaboration with ABK is built on previous successful transactions of which the last were the current bonds. It is gratifying that the issuance was widely received by our clients and local institutions signifying the high quality of the issue and reflecting investors’ confidence in and appetite for local issuances. At Markaz, we look forward to supporting different sectors in obtaining the required financing to develop its operations through managing its sukuk and bonds issuance.
We have structured the first BOT- Backed bonds in Kuwait, the first sukuk for a Kuwaiti real estate company and the first high-yield bonds. We are pleased to be part of ABK’s first Kuwaiti Dinar issuance building on our longstanding relationship and commitment to supporting the nation’s businesses and economy.”
Mr. Nabil Maroof, CEO of NBK Capital said: “The bond issuance reflects our confidence in the local market while further developing the local debt capital market. We are honoured to have assisted ABK in this successful transaction.”
In closing, Mr. Richani added: “I would like to extend our appreciation to the Central Bank of Kuwait, the Capital Markets Authority (CMA) and our joint lead arrangers, Ahli Capital, Kamco Invest, Markaz and NBK Capital for the effective role they played in this transaction’s success.”