KFH Capital arranges two Sukuk issuances for the Turkish government and Dubai Islamic Bank

  • $3 billion of sovereign Sukuk for the Turkish government to finance its projects and economic plans
  • 5-year Wakala Sukuk for Dubai Islamic Bank worth $750 million

The CEO of "KFH Capital", the investment arm of the Kuwait Finance House Group "KFH", Abdulaziz Nasser AlMarzooq, said that the company successfully arranged two Sukuk issuances for Dubai Islamic Bank, worth $750 million, and the Turkish government, worth $3 billion, reflecting "KFH Capital's" position among the major global organizers of sukuk issuance, as well as enhancing the role of Sukuk as a financing tool for companies, banks and governments.

In a press release, AlMarzooq explained that "KFH Capital" played the role of lead organizer in the issuance of $3 billion sovereign Sukuk for the Turkish government; the largest in terms of size. The issuance attracted a substantial demand from over 200 regional and international investors, and the coverage on the issuance amount was more than three-fold the sought volume, i.e. about $10.75 billion. The initial indicative yield hit the level of 7.5%-7.625% per annum, where the over-demand for the issuance contributed to pricing the Sukuk at a final yield of 7.25% per annum. The Sukuk, rated B+ by Fitch and B2 by Moody's, these Sukuk will be listed in the Dublin Stock Exchange.

He noted that the structure of the Sukuk used is leasing and will mature after 5 years from the date of issuance. For the Turkish government, the issuance of these Sukuk is seen as a step forward in its efforts to provide adequate funding from multiple sources for its projects and plans in line with economic development. The issuance gained a large coverage in a record time, attracting investors from the region and the world, which confirms the significance of this Shari'a product that provides subordinate financing for the growth and expansion operations of governments, companies and mega development projects. He stated that KFH Capital is proud to participate in this distinguished issuance of Sukuk early in a new year. It marks continuation of the company's successes and the series of successful issuances it leads, both in terms of size and quality, which solidifies its position among the major global Sukuk arrangers.

About the issuance of Dubai Islamic Bank Sukuk, AlMarzooq said that it comes in line with the constant strong relations between the two sides, which resulted in several issuances during the past years. He explained that the $750 million, 5-year issuance yields 2.74%. The volume of demand for subscription to the issuance amounted to about 3-fold the required amount, and KFH Capital acted as the lead arranger of the transaction, which are Sukuk rated A3 by Moody's and A by Fitch. The Sukuk will be listed in the Dublin and Nasdaq Dubai markets.

AlMarzooq stressed the leadership role of KFH Group on the list of best arrangers for sukuk issuances during 2021, as these two issuances confirm the prominent role of “KFH Capital” in the capital and Sukuk markets, reflecting the confidence that issuers attach to the company in addition to its expertise, competencies and capabilities. All these factors contribute to achieving positive results for the Company's corporate and government customers all over the world. This also reflects the leadership of the KFH Group and its distinctive role in managing and arranging Sukuk issuances.