KIB Issues USD 300 Million Additional Tier 1 Sukuk

Sheikh Mohammed Jarrah Al-Sabah, KIB Chairman

Kuwait, 27 April 2024: The Chairman of KIB, Sheikh Mohammed Jarrah Al-Sabah stated that “As a result of Kuwait International Bank’s (“KIB”) outstanding achievements during the last few years, the solid financial position, its strong credit rating, in line with its well-planned expansionary strategy and its sustainability; and to maintain an appropriate capital adequacy ratio (CAR) level, the Bank decided on issuing an Additional Tier 1 (“AT1”) Sukuk, which was approved by its Annual General Assembly and all competent regulatory bodies.

On Wednesday, 24 April 2024, KIB successfully priced a USD 300 Million AT1 perpetual Sukuk that is classified under Tier 1 capital as per Basel III and CBK guidelines at an annual profit rate of 6.625%. KIB received high demand from investors, as evidenced an oversubscription of over Two times. The final pricing represents the tightest spread ever achieved on an AT1 Sukuk globally with 195 bps spread over US Treasuries. This issuance of perpetual Non-Call 5.5 years Sukuk, is based on “Mudarabah” structure and complied with the Islamic Sharia’a principles.

This issuance has been arranged with efforts made by a group of participating parties including Citi Group and Standard Chartered who acted as Joint Global Coordinators. Abu Dhabi Islamic Bank PJSC, Al Dawli Invest Investment Company K.S.C.C (“KIB Invest”), Bank of Sharjah PJSC, Citigroup Global Markets Limited, Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, KAMCO Invest Company K.S.C.P., Mashreqbank PSC (acting through its Islamic Banking Division), SMBC Nikko Capital Markets Limited and Standard Chartered Bank acted as Joint Lead Managers and Bookrunners. The roadshow launched by KIB attracted investors from the international and regional investors.

^{Raed Jawad Bukhamseen, Vice Chairman and CEO of KIB}

On this occasion, Mr. Raed Jawad Bukhamseen, Vice Chairman and CEO of KIB, stated: “This Sukuk transaction is clear evidence that Kuwait possesses the components required to attract international investors to enter the Kuwaiti market. We are very pleased with the outcome of this Sukuk transaction, which is the third issuance by KIB, the first AT1 sukuk issuance was in 2019 and the second Tier 2 sukuk issuance was in 2020.” He also added: “I would like to express my appreciation and gratitude to the regulatory authorities represented by the Central Bank of Kuwait and the Capital Markets Authority for their continued support to the issuance of Sukuk by our bank, including extending their regulatory approvals and guidance in this regard. I would also like to appreciate the relentless efforts of the global coordinators, lead managers and bookrunners. My gratitude is also extended to all local and international investors, and to the bank’s management team, who participated in realizing this achievement.”

Bukhamseen added: “This AT1 Sukuk has been issued as capital instrument under Basel III Capital Adequacy compliance and in line with the rules and regulations of the Central Bank of Kuwait and the Capital Markets Authority, to be made available for trading in the secondary market, and will be listed on London Stock Exchange’s Market. He also added: “The demand for Sukuk issued by our bank reflects the confidence shown in the strength and solidity of the Kuwaiti banking sector, in general, and the Islamic banking and KIB in particular.”

He also commented: “The issuance of perpetual Non-Call 5.5 years Sukuk, which is in accordance with Islamic Sharia’a, is an important step in fostering the significant role of Sukuk as one of the main products of Islamic banking transactions. The issuance is based on “Mudarabah” structure by which banks may extend financing facilities to governments and companies, and thus, Sukuk has become a vital component of the global financial market.”

Finally, he mentioned that this exceptional demand for KIB’s Sukuk is a clear indication of the confidence shown by both local and international investors in our strategy, as well as our consistent financial performance.

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