Clifford Chance

Clifford Chance advises JLMs on dual US$335.8 million KIPCO Sukuk

Leading international law firm Clifford Chance has advised the Joint Lead Managers on the establishment of the US$2 billion trust certificate programme by Kuwait Projects Company (Holding) K.S.C.P. (KIPCO) and a debut dual issuance of KD 66,050,000 fixed rate sukuk and KD 37,050,000 floating rate sukuk (totalling US$335.8 million) under that programme.

KIPCO is a holding company established in Kuwait with controlling stakes in private and publicly listed operating companies in the MENA region in the financial services (commercial and investment banking and asset management), energy, media, real estate, manufacturing and logistics sectors.

The 6-year fixed rate sukuk was priced with a 6.50% profit rate and the 6-year floating rate sukuk was priced with a Central Bank of Kuwait Discount Rate plus 3.00% profit rate. The proceeds will be used for general corporate purposes.

This is the first issuance of sukuk by a non-financial institution corporate entity in Kuwait, and a debut sukuk issuance by KIPCO.

Clifford Chance's team comprised partner and Global Head of Islamic Finance, Qudeer Latif (Dubai), partner and Head of Middle East Capital Markets, Stuart Ure (Dubai), Shauaib Mirza (Consultant, Dubai), Nader Koudsi (Associate, Dubai) and Saby Mahmud (Trainee, Dubai).

Qudeer Latif commented "We are delighted to have supported KIPCO and its investment banks on KIPCO’s inaugural issuance of KD-denominated sukuk. The success of the transaction reflects the further development of Kuwait’s capital markets."

Abdullah Al Hadad, the Chief Investment Officer at KFH Capital, expressed his pride in leading the first-ever corporate sukuk denominated in Kuwaiti Dinar. Acting as the Sole Structuring Agent, the KFH Capital team collaborated closely with the client to introduce the innovative and ground-breaking Wakala/Murabaha Sukuk. Al Hadad also acknowledged the commendable cooperation of the KIPCO group, which played a crucial role in ensuring the successful completion of this transaction.

Highlighting the significance of this issuance, Al Hadad described it as a pivotal moment that ushers in a new era for prospective Sukuk issuers in the Kuwaiti marketplace. He emphasized that this landmark transaction not only sets the stage but also paves the way for Kuwait-based corporations to utilize Sukuks as a means to fulfil their funding requirements, both in Kuwaiti Dinar and other currencies.

Sunny Bhatia, KIPCO’s Group Chief Financial Officer commented: “We are extremely pleased to have worked with Clifford Chance team in this landmark transaction. Throughout the process their team made invaluable contribution to the success of the transaction.”

KFH Capital was structuring agent, KFH Capital and Kamco Invest were Global Coordinators and along with Warba Bank were Joint Lead Managers.

Consistently ranked Band 1 in legal directories, Clifford Chance was awarded 15 awards at the Bonds, Loans & Sukuk Awards 2023 and was named Banking Legal Adviser of the Year at the Bonds, Loans & Sukuk Middle East Awards 2022, International Law Firm of the Year (Middle East) at the Middle East Legal Awards 2023 and Middle East International Law Firm of the Year at the Chambers Middle East Awards 2023.