United Real Estate Company issues KD 60m bond with a 5-year tenure
KAMCO acts as sole manager and arranger for issuance
KUWAIT: United Real Estate Company (URC) issued a KD 60 million bond with a five-year tenure, with KAMCO Investment Company (KAMCO) acting as the Sole Manager and Arranger for the debt securities issuance.
The bond is comprised of two tranches: KD 32.15 million fixed interest bonds with an interest rate of 5.75 percent, paid quarterly in installments; and KD 27.85 million floating interest bonds with an interest rate set at the discount rate declared by the Central Bank of Kuwait plus 2.50 percent paid quarterly in installments.
In their joint press release, URC and KAMCO said that the bond received a ‘BBB’ rating, a higher rating than URC’s previous bond rating of ‘BBB-’ in 2013, both rated by Capital Intelligence Ratings (CI). The issuance is also the first Kuwaiti Dinar denominated bond in 2018. The issued bonds were in strong demand from institutions and high net worth individuals. CI’s higher credit rating and the demand for quality issues by the investors is reflected in URC’s bond issuance, one of the largest issuances in the local and regional market.
Tariq AbdulSalam, URC Chairman, said, “The high demand on this bond issuance reflects investors’ confidence in URC, particularly in the company’s management team and overall strategy.”
He added that the company will use the bond issuance proceeds to close existing bonds and finance other company activities.
On his part, Faisal Mansour Sarkhou, CEO of KAMCO, expressed his pride in the effort and cooperation portrayed by all involved parties who played a pivotal role in successfully completing this bond issuance. He added that this transaction marks yet another milestone that will pave the path for additional real estate company issuances that will strengthen the local and regional debt markets.
Sarkhou said, “At KAMCO, we believe in the importance of our role in enhancing and supporting the private sector; and promoting the growth of Kuwait’s economy. As acting managers and arrangers, we are pleased with the successful results of URC’s issuance. We look forward to managing more bond and sukuk issuances through our Investment Banking team, who have spared no efforts in delivering the best possible outcome for all our valued clients.”
URC and KAMCO expressed their gratitude to the Capital Markets Authority for its support, commitment and cooperation towards enhancing the financial services industry. The two companies also praised the crucial role of the trusted investors, who were the driving force behind the successful outcome of this transaction.