The CEO of "KFH Capital", the investment arm of Kuwait Finance House Group (KFH), Abdulaziz Al-Marzooq, said that the company successfully arranged two Sukuk issuances for Dubai Islamic Bank, worth USD 750 million, and the Turkish government, worth USD 3 billion, reflecting "KFH Capital's" position among the major global organizers of sukuk issuance, as well as enhancing the role of Sukuk as a financing tool for companies, banks and governments.
In a press release, Al-Marzooq explained that "KFH Capital" was the lead organizer in the issuance of USD 3 billion sovereign Sukuk for the Turkish government; the largest in terms of size. The issuance attracted a substantial demand from over 200 regional and international investors, and the coverage on the issuance was more than three-fold the sought volume, i.e., about USD 10.75 billion. The initial indicative yield hit the level of 7.5%-7.625% per annum, where the over-demand for the issuance contributed to pricing the Sukuk at a final yield of 7.25% per annum. The Sukuk, rated B+ by Fitch and B2 by Moody's, Sukuk will be listed in Dublin Stock Exchange.
He noted that the Sukuk was structured as Ijara sukuk (leasing) with a maturity of 5 years. As for the Turkish government, the issuance of these Sukuk is considered a step forward in its efforts to provide adequate funding from multiple sources for its projects and their plans in line with economic development. The issuance gained a large coverage in a record time, attracting investors from the region and the world, which confirms the significance of this Shari'a product that provides subordinate financing for the growth and expansion operations of governments, companies, and mega development projects. He stated that KFH Capital is proud to participate in this distinguished issuance of Sukuk early in a new year. It marks continuation of the company's successes and the series of successful issuances it leads, both in terms of size and quality, which solidifies its position among the major global Sukuk arrangers.
As for Dubai Islamic Bank’s Sukuk, Al-Marzooq said that it stems from the consistently strong relations between both parties, which resulted in several issuances during the past years. He explained that the USD 750 million, 5-year issuance yields 2.74%. The volume of demand for subscription to the issuance amounted to about 3-fold the required amount, and KFH Capital acted as the lead arranger of the transaction. The sukuk was assigned a rating of A3 by Moody’s and A by Fitch. They will be listed on Dublin and Nasdaq Dubai markets.
Al-Marzooq affirmed KFH Group’s leading role as a top player in sukuk issuances during 2021, as these two issuances confirm its prominent role in the capital and Sukuk markets, reflecting the confidence that issuers attach to the company in addition to its expertise, competencies, and capabilities. All these factors contribute to achieving positive results for the Company's corporate and government customers all over the world. This also reflects the leadership of the KFH Group and its distinctive role in managing and arranging Sukuk issuances.