Kuwaiti Islamic bank, Boubyan Bank, returned to the international market with a benchmark US$500 million Senior Unsecured Wakala/Murabaha Sukuk issuance in March 2022.
In a disclosure to Boursa Kuwait (the Kuwait Stock Exchange), Boubyan Bank Group Vice-Chairman and CEO, Adel Abdul Wahab Al-Majed, confirmed that the 5-year Sukuk transaction was successfully executed and priced at a fixed profit rate of 3.389% per annum payable semi-annually. The proceeds from the issuance, he added, “will have a positive impact on the Bank’s liquidity position and on diversifying the sources of long-term funding while enhancing the regulatory ratios associated with the Central Bank of Kuwait’s instructions.”
The Sukuk was issued by Boubyan Sukuk Limited, a wholly-owned special purpose vehicle on behalf of the Obligor, Boubyan Bank. The Sukuk certificates were issued under Boubyan Sukuk Limited’s US$3 billion Trust Certificate Issuance Programme launched in February 2022. Both the Programme and Obligor were assigned a rating of A, A3 and A- by Fitch Ratings, Moody’s Investors Service and S&P Global.
The certificates, which mature on 29 March 2027, have been admitted for listing on the Irish Stock Exchange trading as Euronext Dublin. According to Boubyan Bank CEO Al-Majed, the transaction attracted strong demand from investors and was 2.4 times over-subscribed with the final orderbook reaching in excess of US$1.2 billion.
Boubyan Bank had earlier mandated Standard Chartered Bank, Wafra International Investment Company and Watani Investment Company, a subsidiary of NBK Capital, to act as global coordinators to the transaction. The three, together with Bank ABC, Emirates NBD Capital, KFH Capital Investment Company, MUFG Securities EMEA, Mizuho International, SMBC Nikko Capital Markets and the Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Islamic Development Bank (IsDB) Group, acted as joint lead managers, with the mandate to arrange a number of investor calls to accounts in London, the GCC, Singapore, EU and Offshore US Accounts. Boubyan Capital acted as Co-Manager to the transaction.
Boubyan Bank reported a net profit of KD17,022,000 for Q1 2022 compared with KD12,357,000 for Q1 2021. Total assets for Q1 2022 reached KD7,459,870,000 compared to KD6,771,533,000 in Q1 2021. Islamic financing facilities to customers reached KD5,670,671,000 compared with KD4,936,763,000 for the same period.
In fact, the DDCAP Group™ supported Boubyan Bank in the successful implementation of Boubyan’s digital approach to processing Sharia’a compliant Corporate Credit transactions, through its award-winning Sharia’a compliant financial technology, ETHOS AFP™.
Chief Executive Officer of Corporate Banking Services at Boubyan Bank, Abdulsalam Al-Saleh, stressed that “the recent years have witnessed rapid and successive developments that made Islamic finance “Murabaha” one of the most important means of financing sought by everyone. More paper-to-electronic transformation, or what is known as the digitization of Murabaha, would expedite obtaining financing and facilitate procedures in order to meet the requirements of customers wishing to obtain Islamic financing quickly and comfortably. Boubyan, with this step, will be the first bank in Kuwait to integrate fully with the ETHOS AFP™ commodities platform of the global DDCAP Group™, in order to achieve better levels of customer service with the greatest level of trust and less user interference, and to provide fast and accurate customer service.”