Chief Executive Officer -KFH Capital, affiliated to Kuwait Finance House Group, Abdulaziz Nasser Al-Marzouq said that KFH Capital acted as a global coordinator and book runner for EQUATE SUKUK SPC Limited’s (“EQUATE SPC”) in collaboration with different global institutions. In addition, KFH Capital also acted in collaboration with HSBC, as Program Arrangers for its debut US$ 500 million Sukuk offering under the US$ 2.0 billion Trust Certificate (“Sukuk”) Issuance Program. Equate issuance is rated Baa2 by Moody's and BBB+ by Standard & Poor's. It has been listed on the Irish Stock Exchange.
Al-Marzouq added in a press release that EQUATE Sukuk is the first issuance approved for a Kuwaiti Corporate by Capital Market Authority as per the new CMA law. He applauded the cooperation between the CMA and the issuance participants. He voiced hope that this move is a starting point for further issuances from Kuwaiti Corporates, and a call for taking advantage of Sukuk product as a significant financing tool in the global markets. Sukuk receive huge investors’ interest and turnout as they play a key role in boosting the expansion and growth plans.
Al-Marzouq stated that the 7-year Sukuk offering will mature in February 2024. The issuance was well received by banks, financial institutions and fund managers globally, with 7 times oversubscription and an order book of US$ 3.7bn.
He said that the issuance witnessed the participation of 270 investors from Middle East, Europe and Asia, indicating the pricing was very competitive to the conventional bonds. This affirms the importance of Sukuk at the global level.
The 7-year Sukuk were priced competitively with a profit rate of 175 basis points over the 7-year mid-swap rate arriving at a coupon of 3.944%. During the book building process the initial price thoughts were released at MS + 210a which was later revised to MS+187a and finally the Sukuk was priced at MS+ 175 bps on the basis of strong demand from investors. This affirms the robust financial position of EQUATE.
Mohammad Husain, EQUATE Group’s Chief Executive Officer commented: “We are very proud of our debut Sukuk issuance which marks our second successful transaction in the global debt capital markets. We are especially proud of the strong investor reception, which is a true testament to the quality of EQUATE Group’s credit.” He expressed his thanks to KFH Capital in recognition of the efforts exerted to take approvals and for the coordination with the CMA and concerned authorities to make the issuance successful.
Al-Marzouq indicated that this success is a continuation of KFH effort in boosting the industrial sector in the country, particularly the petrochemicals. KFH is keen on supporting the national economy by offering financing services. KFH participated previously in offering credit facilities to different projects of EQUATE. Al Marzouq affirmed that KFH stands as a strategic partner in projects in the oil and gas sector, and petrochemical and other important sectors
It is worth noting that Citigroup Global Markets Limited, HSBC Bank plc, J.P. Morgan Securities plc and KFH Capital Investment Company KSCC and NBK Capital acted as Global Coordinators. Citigroup Global Markets Limited, HSBC Bank plc, J.P. Morgan Securities plc, KFH Capital Investment Company KSCC, NBK Capital, MUFG Securities EMEA plc, Mizuho International plc, National Bank of Abu Dhabi P.J.S.C. and SMBC Nikko Capital Markets Limited acted as Joint Lead Managers.