NBK Capital advised KNPC to sign US$ 6.2bn (KD 2.0bn) Export Credit Agency (“ECA”)

NBK Capital advised KNPC to sign US$6.2bn ECA backed corporate borrowing to complete Clean Fuels Project

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Kuwait: June 1, 2017

Watani Investment Co. K.S.C.C. (“NBK Capital”) is pleased to announce Kuwait National Petroleum Company’s (“KNPC”) signing of US$ 6.2bn (KD 2.0bn) Export Credit Agency (“ECA”) backed corporate borrowing to fund the completion of the Clean Fuels Project (“CFP”).

Following the signing of the KWD1.2bn (US$4bn) corporate loan facility in April 2016, NBK CAPITAL continued to carry out its role, as the Exclusive Financial Advisor to KNPC, by securing the second tranche of KNPC’s external debt financing geared towards funding the completion of the CFP. KNPC’s solid credit standing and strategic importance to the State of Kuwait, facilitated the transaction’s success.

Clean Fuels Project is one of the strategic projects of Kuwait National Petroleum Company and Kuwait at large, which is aimed at upgrading and expanding the existing KNPC two refineries at Mina Abdulla and Mina Al-Ahmadi. The project will help increase conversion of fuel oil to higher value products in order to meet expected market demand and tighter specifications

Supported by a regionally unrivaled credit, the transaction involved the following ECAs; Her Britannic Majesty’s Secretary of State acting through the Export Credits Guarantee Department (operating as UK Export Finance – “UKEF”), Korea Trade Insurance Corporation (“K-sure”), The Export-Import Bank of Korea (“KEXIM”), SACE S.p.A (“SACE”), Japan Bank For International Cooperation (“JBIC”), Nippon Export and Investment Insurance (“NEXI”) and Atradius Dutch State Business (“Atradius”).

Notwithstanding the rapidly fluctuating market conditions, KNPC secured long tenor borrowings composed of a combination of direct and covered/insured facilities. The covered/insured facilities had an overwhelming demand from various financial institutions located regionally and internationally.

On the successful signing of the Common Terms Agreement and the Loan Agreement, Faisal Al-Hamad – Chief Executive Officer of NBK CAPITAL said: “The NBK Group, along with NBK CAPITAL, are delighted to have been able to support KNPC in the planning and execution of this landmark and historic transaction. I am also extremely proud of the quality and effort of our transaction team.”

Mr. Al-Hamad added, “This is an important milestone and a major step forward for the oil sector and we hope to witness its continued success and evolution. NBK CAPITAL remain committed to supporting Kuwait’s public sector, whether at the sovereign or quasi-sovereign level for their future strategic initiatives that require NBK CAPITAL’s specialized advisory services.”

Furthermore, Mr. Rani Selwanes – Managing Director and Head of Investment Banking Group concluded in saying, “This is the largest corporate finance transaction under ECA cover. The successful signing was achieved through the engagement and cooperation of seven ECAs – located in Japan, South Korea, Italy, Netherlands, and the United Kingdom – and 11 global banking institutions.”

On NBK CAPITAL’s Investment Banking Services, Mr. Selwanes added “Proven by NBK CAPITAL’s regional track record and unmatched international experience, we will continue to support the government needs including, but not limited to, arranging senior bank financing, debt capital market issuances (bonds and sukuk), and other financial advisory services.”

By way of background, Clean Fuels Project is one of the strategic projects of Kuwait National Petroleum Company and Kuwait at large, which is aimed at upgrading and expanding the existing KNPC two refineries at Mina Abdulla and Mina Al-Ahmadi. The project will help increase conversion of fuel oil to higher value products in order to meet expected market demand and tighter specifications.

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