Clifford Chance acted in Dual Sukuk Issuance for KIPCO, Totaling $335.8 Million

Clifford Chance acted in Dual Sukuk Issuance for KIPCO, Totaling $335.8 Million

Clifford Chance provided legal counsel to the Joint Lead Managers in the creation of a $2 billion trust certificate programme initiated by Kuwait Projects Company (Holding) K.S.C.P. (KIPCO). This programme also saw the successful launch of its debut dual issuance, comprising KD 66,050,000 in fixed-rate Sukuk and KD 37,050,000 in floating-rate Sukuk, with a combined value of $335.8 million, all executed under the mentioned trust certificate programme.

KIPCO is a prominent holding company founded in Kuwait, boasting controlling interests in various private and publicly listed operating firms across the MENA region. The company's diversified portfolio encompasses a wide range of sectors, including financial services (commercial and investment banking, as well as asset management), energy, media, real estate, manufacturing, and logistics.

The six-year fixed-rate Sukuk was issued with a 6.50 per cent profit rate, providing investors with a fixed return over the tenure of the Sukuk. On the other hand, the six-year floating-rate Sukuk was priced with a profit rate consisting of the Central Bank of Kuwait Discount Rate plus an additional 3.00 per cent. The funds raised from these Sukuk issuances will be allocated for general corporate purposes.

This marks the inaugural Sukuk issuance by a non-financial institution corporate entity in Kuwait, and it also serves as KIPCO's debut Sukuk issuance.

Clifford Chance's team for this project included key members such as Qudeer Latif, who is the partner and Global Head of Islamic Finance based in Dubai, Stuart Ure, partner and Head of Middle East Capital Markets also located in Dubai, along with Shauaib Mirza, a Consultant in Dubai. Additionally, the team comprised Nader Koudsi, an Associate based in Dubai, and Saby Mahmud, a Trainee working from Dubai as well.

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

Abdullah Al Hadad, the Chief Investment Officer at KFH Capital, expressed immense pride in spearheading the historic first-ever corporate ukuk denominated in Kuwaiti Dinar. As the Sole Structuring Agent, the KFH Capital team worked closely with the client to introduce the pioneering and groundbreaking Wakala/Murabaha Sukuk. Al Hadad acknowledged the commendable cooperation of the KIPCO group, emphasising their pivotal role in ensuring the seamless and successful completion of this landmark transaction.

Al Hadad highlighted the tremendous significance of this issuance, describing it as a pivotal moment that ushers in a new era for prospective Sukuk issuers in the Kuwaiti marketplace. He underlined that this landmark transaction not only sets the stage but also paves the way for Kuwait-based corporations to tap into the potential of Sukuks as a viable 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 assumed the role of the Structuring Agent, while both KFH Capital and Kamco Invest held the position of Global Coordinators. Additionally, alongside Warba Bank, they jointly served as Lead Managers for the Sukuk issuance.

Clifford Chance, renowned for its legal prowess, has consistently been ranked in the prestigious Band 1 category in various legal directories. The firm's exceptional performance was acknowledged at the Bonds, Loans & Sukuk Awards 2023, where they received a total of 15 awards. In addition to these accolades, Clifford Chance was honoured with the title of Banking Legal Adviser of the Year at the Bonds, Loans & Sukuk Middle East Awards 2022.

Furthermore, the firm's outstanding achievements were recognized on multiple occasions, as they were named 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.