NBK Capital Global Coordinator and Joint Arranger in EQUATE Sukuk

Kuwait: February 21, 2017

  • 7.4x oversubscription with an order book above US$ 3.7bn
  • The issuance received strong support from the local market with interest from both government and financial institutions
  • First and only Kuwait-based guaranteed Reg S Trust Certificate (Sukuk) issuance

Watani Investment Co. K.S.C.C. (“NBK Capital”) acted as Global Coordinator and Joint Arranger in the establishment of Equate Sukuk SPC Limited’s (“EQUATE SPC”) US$ 2.0 billion Trust Certificate (“Sukuk”) Issuance Programme and its debut US$ 500 million 7-year Sukuk offering, maturing in February 2024. EQUATE SPC is a wholly owned subsidiary of EQUATE Petrochemical Co. K.S.C.C. (together with The Kuwait Olefins Company K.S.C.C. rated “Baa2” by Moody’s and “BBB+” by Standard and Poor’s) (altogether “EQUATE Group”). This marks EQUATE Group’s second international debt capital markets issuance, with their first time being their debut US$ 2.25 billion rule 144A/ Reg S dual-series bond offering in November 2016.

7.4x oversubscription with an order book above US$ 3.7bn

NBK Capital, Citigroup Global Markets Limited, HSBC Bank plc, J.P. Morgan Securities plc and KFH Capital Investment Company KSCC acted as Global Coordinators. NBK Capital, Citigroup Global Markets Limited, HSBC Bank plc, J.P. Morgan Securities plc, KFH Capital Investment Company KSCC, MUFG Securities EMEA plc, Mizuho International plc, National Bank of Abu Dhabi P.J.S.C. and SMBC Nikko Capital Markets Limited acted as Joint Arrangers.

The issuance was well received globally by a diversity of both Islamic and conventional investors including fund managers, government institutions/pension funds, financial intuitions and insurance companies, with an over-subscription rate of 7.4x times and a global order book exceeding US$ 3.7 billion. The issuance proceeds will be to refinance EQUATE Group’s existing debt.

Mr. Mohammad Husain, EQUATE Group’s Chief Executive Officer commented: “We are very proud of our debut Sukuk issuance which marks our second successful transaction in the global debt capital markets. We are especially proud of the strong investor reception, which is a true testament to the quality of EQUATE Group’s credit.”

Mr. Faisal Al Hamad, NBK Capital’s Chief Executive Officer added: “We are incredibly honored to have advised EQUATE Group on both of its debt capital markets issuances. The overwhelming demand from investors in Kuwait reflects on the importance of the Kuwaiti market in supporting both regional and global issuances. Furthermore, the successful execution of two landmark issuances for EQUATE further recognizes the EQUATE brand name as a reputable issuer on a global perspective and reflects on NBK Capital’s ability to execute global transactions at the highest quality.”

The Trust Certificates (Sukuk) have an ijara and Murabaha structure. The 7-year Senior Unsecured Sukuk were priced competitively at 100% of the issue price with a profit rate of 175 basis points over the 7-year mid-swap rate, returning a yield-to-maturity of 3.944%.