Kuwait, 22 November 2020:

As part of its efforts to strengthen its capital base and diversify its funding mix, Kuwait International Bank (KIB) issued a $300 million Tier 2 (T2) Basel III compliant 10-Year non-call 5-year Sukuk with an expected rating of [A-] by Fitch. The issuance was priced at a profit rate of  2.375% per annum and was  9 times oversubscribed,  with an order book of approximately $2.7billion. This is the highest rated T2 in Kuwait and the GCC, in addition to being the first USD T2 Sukuk from Kuwait to be listed on London Stock Exchange (LSE).

This transaction followed a series of virtual global investor calls with a number of high-level local, regional and international financial institutions, including Citi and Standard Chartered Bank as Joint Global Coordinators, together with Boubyan Bank, Emirates NBD Capital, First Abu Dhabi Bank, Kamco Invest, KFH Capital and the Islamic Corporation for the Development of the Private Sector (ICD), as Joint Lead Managers and Bookrunners.

Commenting on the issuance, Mr. Raed Jawad Bukhamseen, Vice Chairman and CEO of the Bank , said: "Despite the challenging global environment due to the COVID-19 pandemic during which the market for hybrid capital issuances was limited, KIB was able to issue the first Tier 2 Capital Sukuk out of Kuwait and the highest rated T2 Sukuk in Kuwait and the GCC with an expected [A-] rating. KIB is seeking to be proactive in optimizing its capital structure through this issuance, as it continues to drive its growth strategy and establish itself as an active participant in the regional Sukuk market.”

Mr. Bukhamseen stated that this financial transaction comes after KIB had obtained the necessary approvals from the Central Bank of Kuwait and the Capital Markets Authority, stressing that the Bank is establishing itself as a key player in the regional Debt Capital Market, by playing an active role in both high quality issuances and participation in high quality Sukuk instruments in the local, regional and global markets.

Mr. Bukhamseen added, “This Sukuk issuance confirms that the State of Kuwait continues to offer a prosperous environment that attracts international investors to the Kuwaiti market, irrespective of the impact of the COVID-19 pandemic”. Mr. Bukhamseen continued, “I would like to extend my appreciation to the efforts by The Central Bank of Kuwait and Capital Markets Authority, for their continuous support and guidance, in granting necessary regulatory approvals.

He further added: “We believe that this issuance is a step forward towards strengthening the regulatory ratios set forth by the Central Bank of Kuwait, in addition to diversifying KIB’s long-term financing sources”.

He also noted that this is not the first time that KIB has achieved such a breakthrough, stressing that this Sukuk issuance follows an extremely successful Additional Tier 1 Sukuk issuance in 2019 by KIB, which was 15 times oversubscribed and listed on the Euronext Dublin stock exchange.