KIPCO’s bond issue oversubscribed
The Kuwait Projects Holding Company (KIPCO) has successfully placed 14 million Kuwaiti dinars ($46.7 million) of corporate bonds with a range of Kuwait investors through an oversubscribed issue. The proceeds of the issuance will be used to refinance shorter-term borrowings and for other general purposes.
The bonds carry a BBB Investment Grade rating from international rating agency, Capital Intelligence. The transaction has been structured using Kuwait Inter-Bank Offer Rate (KIBOR) as the benchmark for setting the interest rate rather than the Central Bank of Kuwait discount rate, a move more in line with international capital markets practice.
The three-year bonds mature on April 28, 2006 and pay interest at a rate of KIBOR plus 1.25 percent per annum. The interest rate will be reset and interest paid every three months. The interest rate is subject to a minimum rate of 3.25 percent per annum. The issue price was set at 100 percent.
The interest rate for the first interest payment period has been set at a rate of 3.87 percent per annum, based KIBOR rate of 2.62 percent per annum.
This issue represents KIPCO’s fourth outstanding issue of bonds. The company now has bonds of 104 million Kuwaiti dinars outstanding, with various maturities, against a share capital of approximately KD 105 million. The issue was arranged by KIPCO Asset Management Company (KAMCO) and KAMCO and Global Investment House acted as Joint Lead Managers. — (menareport.com)
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