KIB achieves record spread on USD 300 million Tier 2 Sustainable Capital Sukuk with an annual yield of 5.535%

Kuwait International Bank (KIB) announced the successful pricing of a USD 300 million Tier 2 Sustainable Capital Sukuk. This achievement forms part of the Bank’s ongoing strategy to strengthen its financial position and reaffirm its commitment to ESG and sustainability principles.

KIB achieved significant success with the offering, which carried an annual yield of 5.535% and an oversubscribed order book that peaked at more than seven times, reaching USD 2.1 billion. The Sukuk were priced at 175 basis points above U.S. Treasury yields, signaling strong market demand and confidence in the Bank’s credit strength.

Priced at a record spread – the tightest spread ever achieved on a Tier 2 Sukuk – this issuance marks a major milestone for KIB, reflecting solid investor confidence in the Bank’s performance and strategic direction, while further cementing its solid reputation and leading position in regional and global markets.

Commenting on the issuance, KIB’s Chairman, Sheikh Mohammed Jarrah Al-Sabah, stated: “This successful Sukuk pricing reaffirms KIB’s continued strong performance and success. It also reflects the Bank’s solid financial position and high creditworthiness in both regional and international markets. KIB’s decision to issue these Sukuk is in line with the Bank’s carefully planned expansion strategy and its commitment to maintaining appropriate capital adequacy ratios in line with regulatory requirements.”

Al-Jarrah added: “After fulfilling all relevant controls and procedures and securing approvals from the concerned authorities, the Sukuk were successfully offered and priced on October 9, 2025. The issuance and settlement are scheduled for October 16, 2025, with the Sukuk set to be listed on the London Stock Exchange.”

KIB’s Vice Chairman and Chief Executive Officer, Mr. Raed Jawad Bukhamseen, stated: “The issuance of the Tier 2 Sukuk supports our strategy to enhance financial flexibility and strengthen our liquidity structure, enabling us to better serve customers and respond to market dynamics. This issuance reaffirms that Kuwait enjoys solid economic fundamentals and an attractive environment for global investments.”

Bukhamseen also indicated that the Sukuk issuance received a significant demand from investors, reaffirming the confidence that global markets place in KIB specifically, and in the Kuwaiti Islamic banking sector as a whole. He added: “This issuance is aligned with sustainability principles, reflecting our deep commitment to responsible banking and our integrated strategy to embed sustainability standards across all aspects of our operations, set to drive sustainable growth.”

Furthermore, Bukhamseen expressed his appreciation for the efforts of all parties involved in the arrangement and success of the issuance. A prestigious international consortium was appointed to manage the transaction, comprising Citigroup and Standard Chartered Bank as Joint Global Coordinators, alongside ASB Capital, Arqaam Capital, HSBC, Kamco Invest, KFH Capital, KIB Invest, and QNB Capital as Joint Lead Managers and Bookrunners.

KIB’s Deputy Chief Executive Officer, Mr. Mohamed Said El Saka, commented: “This issuance represents an important step within KIB's strategy to diversify financing instruments and enhance the efficiency of its capital structure. These Sukuk were issued as a capital instrument, qualifying as Tier 2 Capital in accordance with Basel III Capital Adequacy requirements, and are expected to be rated BBB+ by Fitch. Compliant with Islamic Sharia principles, this issuance marks a significant step in reinforcing the role and importance of Sukuk as one of the key instruments in Islamic banking operations. Based on the Sharia concept of Wakala, Sukuk have become an increasingly important component of the global capital market.”

El Saka added: “This issuance reflects our continued commitment to providing tailored and innovative financial solutions linked to environmental and social governance, which contribute to driving the global transition toward a sustainable economy. The funds raised through this issuance will be allocated to finance or refinance projects that align with KIB’s Sustainability Framework.”