Name of borrower: Kuwait Projects Company
Amount: KD103 million
Tenor: 6 years
Underwriter: KFH Capital, Kamco Invest and Warba Bank
Date: Jul 2023
The Kuwait-headquartered diversified investment conglomerate Kuwait Projects Company is Kuwait’s first non-financial institution corporate entity to issue a sukuk transaction denominated in Kuwaiti dinars. The issuance wins Kuwait’s Islamic finance deal of the year award this year.
The offering comprised two parts: a KD66,050,000 ($214 million) fixed-rate sukuk and a KD37,050,000 floating-rate sukuk. It was the first issuance under Kipco’s equity asset based, multi-currency international sukuk programme featuring a wakala/murabaha structure.
The transaction paved the way for Islamic capital market participants to explore new assets for sukuk structuring
This structure was novel in the Kuwaiti market, incorporating shariah-compliant hedging mechanisms, with the company’s equity investments serving as wakala assets of the underlying sukuk.
This arrangement guaranteed that investor funds were hedged until the sukuk’s maturity.
The transaction paved the way for Islamic capital market participants to explore new assets for sukuk structuring, especially for issuers with limited ijara assets. It became a benchmark for issuers considering a similar structure for their sukuk issuances.
Notably, a regional sovereign wealth fund successfully used a similar concept for a multibillion-dollar deal in October 2023.
Kuwait Finance House acted as the sole structuring agent and global coordinator on the transaction.
