Burgan Bank recently acted as a co-lead manager in a KD26.5m covered bond issue for Alargan International Real Estate Company. The announcement comes at a time where domestic corporate bonds issuance is witnessing an increased momentum.
The signing ceremony included Khalid AL Mash’an, Chairman and managing Director of Alargan International Real Estate Company, Sadoun Ali CEO and managing Director of KIPCO Asset Management Company (KAMCO), Manaf AL Hajry CEO- Kuwait Finance Center (Markaz), May Al Mudhaf Chief Investment Banking and Treasury Officer at Burgan Bank and Venkat Menon Chief Operations Officer from Burgan Bank.
The recently issued bonds have received a long term issue rating investment grade of BBB- from Capital Intelligence, one of the world’s leading international rating agencies.
The bonds have been issued only to mature after five years with a basis of two tranches: KD1m with a fixed annual coupon of 6.25% and KD1m with a variable interest of 3.50% over the discount rate from the Central Bank of Kuwait (currently standing at 2.50%), and a maximum of 7.00%.
On the occasion, May Al-Mudhaf, Burgan Bank’s Chief Investment Banking and Treasury Officer said: “We are proud to be one of the key partners in the issuance of this bond. Traditionally, Burgan Bank has been a leading participant in the growing bond arena. The bank continues to achieve excellent returns for its shareholders, and is expected to strengthen its top-line performance, having witnessed a growth in its loan portfolio across commercial and private financial services segments.”
“Such transactions are vital to encourage companies who enjoy high capital adequacy ratio rates to issue bonds as well as sukuks to be able to achieve their desired levels of liquidity, Furthermore, the bank is keen to offer a wide array of investment products for its clients and the opportunity to participate in Al Argan’s bond issue was one of them,” added Al-Mudhaf.
“The issuance of this bond comes at an opportune time as we witness a renewed growth of the local bonds market, more so for the real estate sector,” commented Khalid Al Mash’an, Chairman and Managing Director of Alargan International Real Estate Company. “This is the first bond issued by a real estate company since June 2010. We are also looking forward to more support from various government institutions, with an overall objective of developing local bonds issuance.”