CFC completes $180 m bond issuance
Kuwait City, December 18, 2011
Commercial Facilities Company (CFC), a leading Kuwaiti consumer finance company, has announced the successful completion of a KD50 million ($180 million) local bond issuance in which NBK Capital acted as the lead manager.
CFC is the largest non-bank consumer lender in Kuwait, with gross installment debtors’ portfolio of approximately KD297 million ($1,067 million) as of December 31, 2010, a statement from the company said.
The issuer serves a diverse client base exceeding hundred thousand and enjoys a 30 percent market share of consumer loans.
In 2010, CFC generated an income from credit installments of approximately KD23.3 million ($83.71 million) and a net profit of approximately KD17.1 million ($61.43 million).
Over the past 20 years, CFC has formed a solid track record of issuing bonds exceeding KD 75 million ($269.44 million) combined, which were paid off in time without extensions, the statement said.
Today’s KD50 million ($179.63 million) bond is the largest of its previous issuances. The company’s reputable credit record and exceeding financial reputation were drivers behind the successful subscription of this bond offering.
The bond issuance marks the first local announcement in the last 18 months and the first to be approved and supervised by Kuwait’s newly formed Capital Markets Authority, yet another significant milestone in CFC’s illustrious market presence.
The valuable amortising bonds issued by CFC have a four-year tenure and were issued at a floating rate paying investors a coupon of 1.40 percent yearly over the declared CBK discount rate, it said.
The bonds are issued at par, pay coupons quarterly in arrears, and will be redeemed in quarterly installments after the second year from issuance date. Proceeds from CFC’s bond issuance, which was rated BBB by Capital Intelligence, will be used for general corporate purposes.
Salah Al-Fulaij, CEO of NBK Capital, said: “This issuance is an important one as it comes at a vital time for financial institutions that are flushed with liquidity, giving them a solid, profitable and prudent investment opportunity in one of Kuwait’s blue-chip companies.” – TradeArabia News Service