Tariq Mohammed AbdulSalam
United Real Estate raises $212m via bond
Kuwait, June 24, 2013
Kuwait-based United Real Estate Company (URC), a leading real estate development company has completed a KD60 million ($211.8 million) bond issue which was oversubscribed by almost 50 per cent.
Kamco, Gulf Bank, and Burgan Bank were the joint lead managers of the issue.
The five-year bond was rated investment grade BBB- with a Positive Outlook by Capital Intelligence and was issued in fixed and floating rate tranches of which, one will pay a fixed interest rate of 5.75 per cent per annum, while the second tranche will pay a floating interest rate of 3.25 per cent over the CBK discount rate, provided that the rate shall never exceed 1 percent per annum over the fixed rate for the fixed tranche.
Interest will be paid quarterly in arrears and the bond will mature in June 2018. Subscribing customers will enjoy a Kuwaiti Dinar denominated fixed income investment opportunity which will deliver regular income in the form of quarterly coupon payments. Redemption of the bond will be upon maturity, at the end of the full five-year term.
The proceeds of the bond will be used to refinance the KD40 million bond ending on June 22, 2013 and the remainder for general corporate purposes.
Tariq Mohammed AbdulSalam, URC’s chairman stated, “The appetite of the market to the URC bond issue and the oversubscription is a testament to URC’s strong financial credibility and sound management approach.” - TradeArabia News Service