Kuwait Finance House (KFH) announced its successful issuance of $ 750 million AT1 Mudaraba Sukuk.

Chairman of Kuwait Finance House (KFH) Hamad Abdulmohsen Al-Marzouq said that the issuance received subscription orders exceeding $ 2 billion, by close to 3 times the targeted issue size, with an annual yield of 3.6%.

He added that Mudaraba Sukuk aims to support KFH`s Tier 1 capital in accordance with Central Bank of Kuwait instructions and Basel III requirements. The new issuance gives KFH the opportunity to diversify its financing resources, increase its financial and investment capabilities, support the infrastructure projects and the local productive economic sectors as well as help customers with their expansion plans regionally and globally. The sukuk is a perpetual non-callable 5.5 year instrument and will be listed on the London Stock Exchange. 

Al-Marzouq said that this historic Sukuk is the largest issuance in Kuwait in terms of size and has the lowest yield for an AT1 issuance in Kuwait.

“Acted as global coordinator and joint lead manager for the Sukuk issuance along with other financial institutions, KFH Capital has succeeded in strengthening its role in arranging Sukuk issuances regionally and globally.” Al-Marzouq said.

He praised the success of the deal which was oversubscribed in one day receiving orders from investors from the Middle East, Europe and Asia, most of them banks, financial institutions and investment funds.

Al-Marzouq explained that the high demand on Sukuk reflects the confidence of investors from different regional and international capital markets in KFH and its capabilities and strategies, in addition to their trust in the economy , the banking sector and the local market despite current challenges posed by covid-19.

He added that the successful issuance of KFH Sukuk is a clear indication of the bank`s strong credit, financial position and the prestigious position it enjoys among regional and global investors, in addition to its efficient operations and reliable and outstanding performance as one of the leading banking groups in the region.

Given the high demand of investors from all over the world on subscribing to Sukuk recently issued by GCC companies and Banks, Al-Marzouq stressed the importance of the Islamic financial instruments and their role in enhancing the global capital markets and helping issuers implement their future expansion and growth plans.