Markaz suc­cess­fully closes a 5-year KD 25m bond is­sue

Kuwait Times - - BUSINESS -

Kuwait Financial Cen­tre “Markaz” and Gulf Bank an­nounced in a joint state­ment the suc­cess­ful com­ple­tion of “Markaz” 5 years bond is­sue with a nom­i­nal value of KD25 mil­lion, which was oversubscribed. This ex­ten­sive de­mand re­flects the in­vestors’ trust in “Markaz”, the qual­ity of the is­sue, and the high cred­it­wor­thi­ness of “Markaz,” in ad­di­tion to the ef­fec­tive­ness of the joint dis­tri­bu­tion ef­forts with Gulf Bank. “Markaz”, the Is­sue Man­ager, has ap­pointed Gulf Bank as the Financial Ad­vi­sor and Sales Agent.

The bonds are is­sued in two tranches, one with a fixed in­ter­est rate of 5% an­nu­ally payable quar­terly, while the other tranche offers a float­ing in­ter­est rate of 2.25 per­cent above the Cen­tral Bank of Kuwait dis­count rate, an­nu­ally and payable quar­terly.

It is worth not­ing that these bonds, due in 2021, are is­sued in Kuwaiti di­nar and enjoy a credit rat­ing of (BBB) from Cap­i­tal In­tel­li­gence. The credit rat­ing re­flects the di­ver­sity of “Markaz’s” in­vest­ment as­sets and the good level of liq­uid­ity, in ad­di­tion to the de­crease of the lever­age level, and the good flow of rev­enues from com­mis­sions, ad­min­is­tra­tive fees, di­rect and in­di­rect in­vest­ments.

Manaf Al­ha­jeri, “Markaz” CEO, said: “We are pleased to is­sue the new bonds, which rep­re­sent the third is­sue of ‘Markaz,’ re­flect­ing the trust of the cap­i­tal mar­kets in the qual­ity of Markaz’s is­sues. The ex­ten­sive par­tic­i­pa­tion of cor­po­rate in­vestors in this new is­sue confirms this trust again in ‘Markaz,’ and re­flects the suit­able pric­ing. We hope in light of these pos­i­tive signs that cor­po­rate ef­forts in both the pub­lic sec­tor and pri­vate sec­tor will con­tinue to cre­ate a strong and deeply es­tab­lished bonds mar­ket.”

Al­ha­jeri added: “We cher­ish our strong re­la­tion­ship with Gulf Bank as financial ad­viser and sell­ing agent, and we seek to main­tain and re­in­force this re­la­tion­ship through the con­tin­u­ous co­op­er­a­tion be­tween us. We en­trusted Gulf Bank with this role in this is­sue, and also the one pre­ced­ing it, in view of the strong mar­ket po­si­tion it en­joys as well as our con­fi­dence in the po­ten­tials of its dis­tri­bu­tion net­work. Gulf Bank is a lead­ing financial in­sti­tu­tion with a strong net­work of branches. We are con­fi­dent that our agree­ment with the bank is es­sen­tial to reach a wider base of In­vestors.”

Mean­while, An­toine Da­her, CEO of Gulf Bank said: “We are pleased to have played an ac­tive role in suc­cess­fully clos­ing the Markaz bond is­suance. The is­sue was well re­ceived by the in­vestors and was oversubscribed due to the ex­cel­lent rep­u­ta­tion of ‘Markaz’, the dis­tinc­tive con­di­tions of the bonds, as well as the out­stand­ing dis­tri­bu­tion ca­pa­bil­i­ties of Gulf Bank. We have of­fered both our in­sti­tu­tional and pri­vate bank­ing clients the op­por­tu­nity to sub­scribe in these bonds. Fi­nally, we be­lieve that we achieved a sig­nif­i­cant milestone for Gulf Bank by adding this is­sue to the ex­ten­sive set of di­ver­si­fied in­vest­ment prod­ucts of­fered to our clients.”

The in­ter­na­tional credit rat­ing com­pany “Cap­i­tal In­tel­li­gence” af­firms the credit rat­ing of “Markaz” bonds at the (BBB) in­vest­ment grade with a sta­ble out­look. It stated in its re­port that the trans­for­ma­tion in the as­sets di­ver­sity away from the most fluc­tu­at­ing financial mar­kets to­wards the rel­a­tively sta­ble real es­tate sec­tor is a fac­tor for supporting the sta­bi­liz­ing of the rat­ing. Fur­ther­more, the rat­ing re­flects the strength of the brand, the con­ser­va­tive busi­ness model and good rep­u­ta­tion of the com­pany.

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