Kipco has appointed Burgan Bank and Kipco Asset Management Companyjoint lead managers of the facility. Burgan Bank will also act as fiscal agent for the proposed bond.
‘The bond will have a five-year tenor and will mature in November 2006,’ says Abdullah al-Qassar, assistant general manager (treasury) of Burgan Bank. Investors will be offered an option to redeem, after a year, part or all of their investment.
The bond carries interest of 150 basis points over the discount rate offered on the Kuwaiti dinar. At present, the interest rate offered on the Kuwaiti dinar is 4.75 per cent.
Cyprus-based rating agency Capital Intelligence has assigned a BBB investment grade rating to Kipco. ‘The [proposed] facility will be used, in part, to redeem an existing KD 25 million [$80.5 million] bond which is maturing in May 2002. The remaining amount will be for general purposes and to minimise the cost of funding,’ says Al-Qassar. In 1999, Kipco issued a three-year bond with a minimum annual interest rate of 8 per cent.