KUWAIT: April 28, 2016
In a landmark transaction and advised by NBK Capital, Kuwait National Petroleum Company signs KWD1.2bn (US$4bn) KWD-loan facility to fund the construction of the Clean Fuels Project (“CFP”) from 11 local banks
Watani Investment Company K.S.C.C (“NBK CAPITAL”) is pleased to announce Kuwait National Petroleum Company’s (“KNPC”) signing of a KWD1.2bn (US$4bn) corporate loan facility to partially fund the Clean Fuels Project (“CFP”).
NBK CAPITAL assisted KNPC in securing its first external debt financing and Kuwait’s largest KWD-denominated bank syndication in history. KNPC’s solid credit standing and strategic importance to the State of Kuwait, facilitated the transaction’s success.
The recently signed KWD commercial bank tranche is the first of a multi-tranche financing exercise managed by NBK CAPITAL for KNPC.
Notwithstanding the current market conditions, KNPC secured long tenor loans from the local banking market. The corporate borrowing composed of both conventional and Sharia compliant facilities, has a tenor of 10 years and an amortizing repayment structure after a grace period.
NBK CAPITAL assisted KNPC is assessing and appointing Mandated Lead Arrangers (“MLAs”) in a comprehensive and transparent process. After the thorough review of the banks’ proposals by KNPC, National Bank of Kuwait (“NBK”) and Kuwait Finance House (“KFH”) were appointed as MLAs. All other banks operating in Kuwait were subsequently invited to in the syndication. 11 banks in total eventually participated in this landmark transaction.
On the successful signing of this tranche, Mr. Faisal Al-Hamad – Chief Executive Officer of NBK CAPITAL said: “We are extremely proud to work alongside KNPC; advising them on this landmark transaction. This is a great day of success for all parties involved including KNPC, its parent, Kuwait Petroleum Corporation and Kuwait at large. I am also very proud of the quality and effort of our transaction team.”
Mr. Al-Hamad concluded in saying, “I would like to extend my gratitude to KNPC for their trust in mandating NBK CAPITAL to advise on such a high profile transaction. NBK CAPITAL looks forward to continue 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 including 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.