Warba Bank issues Additional Tier 1 (AT1) Sukuk

Warba Bank successfully issued additional Additional Tier 1 (AT1) sukuk worth KD 80 million, with an annual yield of 5.50%. The success of this offering among local investors in local currency demonstrates the continued development and depth of Kuwait’s Islamic financial markets. The transaction saw broad participation from financial institutions, private banking clients, and wealth management investors, and constitutes part of the bank’s ongoing capital and liability management strategy.

Initially, Warba Bank launched the issuance at KD 75 million. However, strong investor demand led to a rapid increase in the order book during the first week of marketing, prompting the bank to raise the issuance size by KD 5 million to reach KD 80 million.

Yousef Al-Sharji, Acting Head of Investment Banking at Warba Bank, stated, “The successful pricing of this issuance, with a profit margin of 200 basis points above the discount rate set by the Central Bank of Kuwait, reflects investors’ confidence in the bank’s strong financial position and its long-term strategic direction. We are certainly pleased to witness this widespread interest from local investors, which enabled us to complete the issuance successfully under attractive financing terms.”

Al-Sharji added, “The level of demand achieved is noteworthy, especially given current geopolitical developments and instability affecting regional and global markets. This strong interest from a diverse base of local investors confirms their confidence in the bank’s creditworthiness and financial performance, while also reflecting the robustness and growing development of Kuwait’s capital markets, which continue to provide effective access to regulatory capital for issuers.”

The bank also commended the contributions of KFH Capital, Markaz Financial Company, and Warba Bank, in their capacity as joint bookrunners and joint book managers, noting that their expertise and execution capabilities were instrumental in successfully completing the transaction.

Mohammed Al-Hajri, Head of Investment Banking Services at KFH Capital, said, “We are pleased to have played a pivotal role in the success of this prominent issuance of Warba Bank’s additional AT1 sukuk worth KD 80 million. In addition to our role as joint bookrunner and joint book manager, KFH Capital played a central role in coordinating the various stages of the process. We also acted as the placement agent and settlement agent, contributing to the smooth and efficient execution of the transaction from launch through final settlement.”

Al-Hajri added, “The strong investor interest and the successful increase in the issuance size to KD 80 million reflect the depth of liquidity available in Kuwait’s Islamic capital markets. It also underscores investors’ confidence in Warba Bank’s strong credit profile and its future growth prospects. This issuance reinforces KFH Capital’s position as a trusted partner in providing Sharia-compliant capital market solutions, and highlights its ability to deliver comprehensive execution services covering all stages of the issuance efficiently and professionally. We look forward to continuing our partnership with Warba Bank and supporting its efforts to achieve its long-term strategic objectives.”

In this context, Ali Khalil, Chief Executive Officer of Kuwait Finance House (KFH), stated that the success of Bank of Kuwait and the World’s sukuk issuance, as evidenced by the strong investor demand, the diversified base of participating investors, and the competitive yield achieved, clearly reflects investors’ confidence in Bank of Kuwait and the World, as well as the ongoing development of Kuwait’s debt instrument markets in terms of depth and maturity.

Khalil added: “This confidence also underscores the resilience of the Kuwaiti economy and the strength of its financial position, supported by substantial sovereign financial reserves and the stability of the Kuwaiti dinar, thanks to the prudent monetary policies and effective oversight implemented by the Central Bank of Kuwait. These measures have contributed to strengthening the banking sector’s resilience and its capacity to navigate challenges, while maintaining favorable financing conditions in dinars compared to dollar-denominated funding markets.”

He continued: “We at KFH are proud to have participated as co-lead arranger in this successful transaction, building on our long-standing professional relationship with Bank of Kuwait and the World. We view this issuance as another important step toward developing Kuwait’s debt instrument markets, enhancing their depth, diversity, and liquidity.”

This issuance, which includes a call option for the bank after five years, strengthens the bank’s capital base and financial flexibility, thereby supporting its strategic objectives and enhancing its ability to achieve sustainable growth.