First bond issuance by an insurer in Kuwait; GIG raises $198mn

By Amirtha P S, Desk Reporter
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Gulf Insurance Group (GIC), the largest insurance Group in Kuwait, has successfully issued $198 million Perpetual non-call 5 subordinated Tier 2 bonds, representing its debut issuance in the debt capital markets.

The bond issuance represents a key milestone in Kuwait’s capital market as it is the first perpetual bond issuance denominated in Kuwaiti Dinar and the first bond issuance by an insurance company.

The issuance attracted a large number of local institutional and qualified investors and achieved an oversubscription in a short period, signifying GIG’s financial strength. The regional non-banking financial powerhouse, Kamco Invest acted as the Lead Manager and Structuring Advisor for GIG’s debut issuance.

The bonds were issued in two tranches, a fixed coupon tranche with a coupon of 4.5 percent and a floating coupon tranche with a coupon of 2.75 percent over the Central Bank of Kuwait’s discount rate. The bonds have been assigned an issue rating of “BBB+” by S&P Global Ratings and provide eligible Tier 2 capital to further enhance GIG’s financial strength.

Commenting on the issuance, Mr. Khaled Saoud Al Hasan, Group CEO of GIG said, “The successful issuance of the bond reaffirms our strong financial position and investors’ confidence in our competitive position and future. This issuance will not only contribute to enhancing our capital adequacy but will support our ongoing growth strategy.”

Earlier this year, the Group completed the acquisition of AXA’s operations in the Gulf region, making GIG one of the largest and most diversified insurance groups in the Middle East and North Africa. After the full integration of AXA’s operations in the Gulf region, the Group’s premiums are expected to reach approximately $2.5 billion in 2022, according to “AM Best”, the American credit rating agency that focuses on the insurance industry, which recently affirmed “A” rating of the Group’s with a stable outlook.

Mr. Faisal Mansour Sarkhou, CEO of Kamco Invest said, “We are thrilled by the demand we have witnessed on the GIG bond which is a testimony of the need for investment-grade debt instruments. The healthy responses received from investors also reflect their confidence in the region and the private sector.”

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