Wafrah International Investment Company announced its role as a global coordinator and issuance manager for Boubyan Bank’s senior unsecured sukuk amounting to USD 500 million, with a return of 3.389% per annum paid semiannually.
Wafra said in a press release that the issued sukuk is the first international sukuk issuance in Kuwait in 2022, the largest senior unsecured sukuk issuance in Kuwait and the bank's second issuance under its sukuk program established in 2020.
The company stated that despite global markets’ volatility, the issuance gathered strong demand from a diverse base of global investors, as total orders reached about USD 2.1 billion (2.4X the offering) from more than 30 investors.
Wafra indicated that the high demand contributed to pricing the lowest expected profit rate for the issuance by 3.389% (same as the US 5-year treasury bonds + 100 basis points), i.e., lower than the initial price of 115 basis points.
The issuance was globally diverse, attracting attention from the GGC, Europe and Asia, with applications distributed from different types of investors, including fund managers, international institutions, and banks.
Meanwhile, Executive Vice President and Head of Asset Management, Mana Al-Sanea, commented: We are proud of our advisory efforts to work with Boubyan Bank as a global coordinator towards achieving another historic issuance, in light of markets requirement for exceptional efforts and expertise to ensure the success of the issuance.
Al-Sanea added that this offering is a milestone in strengthening the role and importance of sukuk, as one of the main tools for Islamic banking operations. This tool can provide the necessary financing for governments and companies, as the sukuk instrument has become an important part of the global financing market.
Vice President of Fixed Income Department, Mishaal Al-Saleh, said: “Wafra is proud of its success in completing the company’s first experience as a global coordinator and issuance manager for one of the largest sukuk issuances, and one of the most important financial institutions in Kuwait.
Al-Saleh explained that by managing this issuance, Wafra Company confirms its commitment to developing the fixed income market and Islamic sukuk in particular, and attracting more international investments to the GCC countries, noting that sukuk issuance was successful thanks to the efforts exerted by “Wafra” and other issue managers in creating a subscription register of more than USD 1.2 billion, an indication of the global financial markets' high confidence in sukuk as a financial tool, as well as the strength and solvency of Kuwaiti institutions.
The company stated that the issuance constitutes unsecured primary sukuks under the umbrella of the global sukuk program, which has recently been increased in size from one USD 1 billion to USD 3 billion, pointing out that the securities received an “A” rating from Fitch, which is considered a high credit rating.
The Company also indicated that the issuance proceeds will be used to diversify the bank's funding sources, in addition to fulfilling the bank's general objectives. Boubyan Bank is considered one of the leading banks in Kuwait, and the second largest Islamic bank in terms of assets. The bank maintains the credit rating of "A3" from Moody's, "A-" from Standard & Poor's, and "A" from Fitch.
The issuance was attended by NBK Capital Investment Company and Standard Chartered Bank as global coordinators and lead managers, and the Arab Banking Corporation, Emirates NBD Capital, KFH Capital, Mitsubishi Securities Group, Mizuho Financial Group and SMBC Nikko Capital and the Islamic Corporation for the Development of the Private Sector (ICD) as issuance managers, and Boubyan Capital as Co-issuance manager.