The Wafra International Investment Company has announced its role as co-manager in the issuance of an initial unsecured sukuk for Kuwait Finance House (KFH) valued at one billion dollars. The sukuk has an annual return of 5.011%, payable semi-annually under the sukuk program, and will be listed on the London Stock Exchange.
According to a press statement by Wafra, these sukuk represent the first international issuance from Kuwait for 2024, marking one of the largest unsecured primary sukuk issuances from Kuwait and KFH’s inaugural issuance under the sukuk program established in 2023.
Despite global market fluctuations since the start of the year, the issuance process witnessed exceptional demand from a diverse range of global investors, with total requests reaching approximately $3.45 billion, equivalent to 3.45 times the value of the issue.
Wafra highlighted that the strong demand contributed to pricing the lowest expected profit rate for the sukuk at 5.011%, which is less than the initial price of 135 basis points. The issuance achieved global diversity in participation, with investors from the Middle East, Europe, and Asia, including fund managers, international institutions, and banks.
Mishal Al-Saleh, Vice President of the Asset Management Sector and Head of Fixed Income Management at Wafra International Investment Company, said: “Wafra is proud of its success in completing the company’s second participation process as a co-issuance manager for one of the largest sukuk issues and from one of the most important financial institutions in Kuwait and the world.”
Al-Saleh explained that by participating in the management of this issuance, “Wafra” confirms its commitment to investing and developing the fixed income market and attracting more international investments to the Gulf countries, indicating that the issuance succeeded, through the efforts of the issuance managers, in creating a subscription record of approximately 3.45 billion dollars, an indication of regional and global markets confidence with the strong financial solvency of Kuwaiti institutions.
The company explained that the issuance constitutes the first unsecured initial Sukuk under the umbrella of the global Sukuk program that was established in 2023, with a total size of $4 billion, noting that the securities obtained an “A” rating from Fitch Rating Agency, which is a high credit rating.
The company indicated that the proceeds from the issue will be used to diversify the bank’s funding sources in addition to the bank’s general purposes. Kuwait Finance House is considered the largest bank in Kuwait and the second largest Islamic bank in terms of assets in the world, and the bank still maintains the credit rating of “A2” from Moody’s Rating Services, and “A” from Fitch Rating Services.
It is worth noting that Wafra International Investment Company has recently introduced a fixed income within the asset management sector, where the department, through a specialized investment team, manages portfolios and funds that invest in the department fixed income instruments (bonds and sukuks) local and regional and in all major currencies.
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