Boubyan Bank’s Sukuk Oversubscribed by More Than 6 Fold, Amounting to USD 4.6 Billion Approximately
Al-Saleh: The Oversubscription Confirms Global Investors’ Confidence in Boubyan’s Future and Their Recognition of Its Achievements over the Past Years
Boubyan Bank has announced its regional and international success in covering the subscription in its first initial unsecured sukuk under the umbrella of a sukuk program with bids amounting to USD 4.6 approximately, i.e., the issuance was oversubscribed by more than 6 fold the targeted amount, which reflects the solid position of the bank.
The bank made a roadshow to meet several investors in Dubai and London, then proceeded with the issuance of the USD-denominated 5-year sukuk amounting to USD 750 million, which will be listed on the Irish Stock Exchange at a 2.593% annual profit rate; this rate is the lowest global Sukuk Issuance from Kuwait at all, reflecting the solid creditworthiness of the bank and the strong confidence in the bank by investors.
The issuance was subscribed in by 190 local, regional and international investors, including banks, and global & sovereign investment institutions, confirming investors’ high confidence in Boubyan Bank.
GCC & ME investors accounted for 51% of the issuance subscription, with 23% going to European investors, 23% to Asian investors, and the remaining 3% going to other investors.
Mr. Abdul-Salam Al-Saleh, the bank’s Deputy CEO stated: “Thanks to Allah, the Almighty, and then to the confidence of the investors, we managed to issue a major sukuk issuance that confirmed Boubyan Bank’s international and regional status and reputation, gained owing to its achievements over the past years across many levels.”
“This reflects investors’ confidence in the continuity of Boubyan Bank’s success and improvements. The issuance will have a positive effect on the bank’s liquidity position, and the diversification of its funding sources, while enhancing our CBK-related regulatory ratios.”, he added.
Al-Saleh further referred to the fact that the issuance was rated A+ by Fitch Ratings, the global rating agency, coupled with Boubyan Bank’s solid ratings from Fitch, Standard & Poor’s & Moody’s.
Islamic Investment Instruments
Al-Saleh went on to add: “We are proud of our achievements since this does not represent a success for Boubyan Bank alone, rather, this is a success for the Islamic finance industry in general. It further confirms the sound investment climate in Kuwait overall, as it enjoys various factors that appeal to global investors in light of the available good opportunities such as Boubyan Bank’s sukuk.”
He added: “Subscription in Boubyan Bank’s sukuk is a good investment opportunity, considering the bank’s achievements over the past years, and its good growth rates in terms of assets or deposits’ growth in addition to the increase in operating profit and the bank's market shares.” Al-Saleh remarked: “All indicators show that there is an increasing demand for Islamic financial and investment instruments, considering the growth rates over the past two decades, and the expectations to follow the same positive pace.”
Last November, Boubyan Bank obtained the final approvals for a sukuk issuance programs, where HSBC and Standard Chartered acted as global arrangers and dealers in the widely successful issuance while the Arab Banking Corporation, Boubyan Capital, the National Bank of Abu Dhabi, HSBC, the Islamic Corporation for the Development of the Private Sector, Baitak Capital, Kuwait International Bank, Standard Chartered Bank, and Warba Bank acted as managers.