KFH Capital arranges first $1.25bn sukuk for STC, launches $ Sukuks Index

KUWAIT: Chief Investment Banking Officer at KFH Capital, Right arm of KFH Group, Abdullah Sulaiman Al-Haddad said that "The company has succeeded in enhancing its role in the sukuk field by arranging new issuances and enhancing the market and its products, thus placing KFH Capital in a leading position, globally and regionally, and affirming KFH leading position and expertise in this field".

Abdullah Al-Haddad

Al-Haddad stated, in a press release, that KFH Capital has finalized recently the arrangement of a $1.25 billion First Sukuk Issue Transaction for Saudi Telecommunications Company. The sukuk issue is a 10 years transaction with returns approximating 3.89 percent. The transaction comes as part of the company's $ 5 billion Sukuk Program which is governed by the Sukuk Issuance Regulation 144 A and Reg. S system of the US Securities Act. The Sukuks are listed in the Irish Stock Exchange. Subscription volume reached 3x the targeted amount, thus reflecting the world's tremendous trust in Saudi Economy and the company's capabilities which are rated A1 by Moody's Rating Agency.

Concerning government sukuks, Al-Haddad said that KFH Capital was one of the leading arrangers of the Turkish government sukuks for $2 billion where demand on sukuks exceeded $4.9 with 5.8 percent return for a three-year term. This issue reflects the robust Turkish economy and appetite of Sukuk investors to acquire this kind of sukuks. KFH Capital acted as the Main Arranger of A 1 billion sukuk transaction for Sharjah government for seven years term, 3.854 percent returns, a rating of A3 by Moody's and BBB+ by S&P. Subscriptions amounted 5x the issuance amount. The sukuks were listed on the Irish Stock Exchange and NASDAC Dubai Index.

Al-Haddad added that the major contribution made by KFH Group in the Premier Sukuk market including (issuance, arrangement and restructuring) has achieved the company a highly reputable position worldwide, placing KFH Group on top of the banks organizing the sukuk issuance transactions through Bloomberg Global Platform where it achieved the first position regionally and third position globally. Al-Hadad reiterated that these positions express the company's endeavor and success in the field of sukuks as well as the powers of the company's human capabilities and expertise in arranging and issuing sukuks for several decades, thus rendering KFH Group as one of the most reputable references in the field of sukuk worldwide.

Al-Haddad revealed that, for further enhancement of KFH Group contribution to the sukuk market, KFH Capital has launched a new index to follow up and measure sukuk performance, as the first Islamic financial institution that takes the initiative to provide a new revolving instrument to follow up and Annalise $ issued sukuks in global markets. This contribution comes to affirm KFH Group pioneering role in the Sukuk market and reflect the groups leading position in the premier and secondary Sukuk markets. It also reflects the great trust in the Sukuk product as one of the emerging financial instruments in the debt markets worldwide. The index aims to provide a measurement of one of the most significant Islamic products at present.

He indicated that the company's initiative to launch the index in cooperation with "S&P Dow Jones Indexes" and listing the same on the Bloomberg Global Platform reiterates the company's keenness to enhance the index related products system which has attracted investors significantly, namely fund managers, wealth managers, banks investment companies. The availability of an accredited Sukuk index as an analytical instrument shall participate in market promotion, performance enhancement and increased demand on Sukuk product as per highly accurate and accredited information. He affirmed also that the index is considered as the first of its kind for an Islamic financial institution and represents a qualitative addition for the growing Sukuk issuance and trading activity worldwide. The index is a price index which depends on the movement of Sukuk prices and related returns. The index components were distributed into various credit risk categories highly rated by global rating agencies as well as other unrated risks. The index depends on information related to High liquidity Sukuks with high Issue volumes.

The index is limited to $ issued Sukuks which represent the majority of Sukuks issued by governments, companies and global corporates including GCC countries, Turkey and certain Asian markets.