Boubyan Bank Issues Mudaraba Sukuk Worth 90 Million Dinars in the Additional First Tranche of Capital

Boubyan Bank announced the successful completion of its first local currency Mudaraba Sukuk issuance within the additional Tier 1 capital tranche, valued at 90 million Kuwaiti dinars. This move aligns with the bank’s strategy to manage its capital structure and diversify its funding instruments, thereby supporting its future growth plans. The issuance attracted strong investor interest, reflecting confidence in the bank’s solid financial position and credit standing. The Sukuk were priced at 200 basis points above the discount rate set by the Central Bank of Kuwait. The issuance also contributes to strengthening the bank’s Tier 1 capital adequacy ratio and enhancing its capacity to support future growth, underscoring confidence in the bank’s financial strength, credit rating, and long-term strategy.

High Level of Confidence

In this context, Adel Al-Mutairi, Head of the Treasury Group at Boubyan Bank, stated, “The success of this issuance represents a strategic milestone in Boubyan Bank’s efforts to strengthen its capital base and provide an effective tool for efficient and flexible capital structure management, supporting asset growth and maintaining financial stability in accordance with Central Bank of Kuwait regulations and applicable supervisory requirements.” He added that the launch of the first local currency Sukuk issuance marks a significant addition to Boubyan’s track record in capital markets, while also reflecting the development of the local debt instrument market and the ability to offer diverse investment and financing options compliant with Islamic Sharia principles. He clarified that the issuance supports the bank’s approach to diversifying its capital instruments, noting that the demand for the issuance confirms investors’ confidence in Boubyan’s performance and its ability to issue capital instruments compliant with Islamic Sharia that meet their aspirations and needs. Al-Mutairi emphasized that the achievements are not only a success for Boubyan Bank but also evidence of the strength of Kuwait’s Islamic finance industry and the robustness of its investment climate, as well as the attractiveness of the regulatory and economic environment that supports sustainable and advanced financing, thereby reinforcing Kuwait’s position as a regional Islamic financial hub.

Local Capital Market

Commenting on the issuance, Abdullah Al-Sharikh, Head of Markets and Banking Investments at KAMCO Invest, said, “We are proud of KAMCO Invest’s role as the sole bookrunner for Boubyan Bank’s first local currency Sukuk issuance, which saw strong investor interest reflecting confidence in the bank’s strength, its standing, and the resilience of the Kuwaiti banking sector. We appreciate Boubyan Bank’s trust in KAMCO Invest and look forward to continuing to support initiatives that contribute to the development of the local capital market and provide financing solutions that meet the needs of issuers.”

A Significant Addition

For his part, Abdulmohsen Al-Gharbali, Senior Vice President of Asset Management at Boubyan Capital Investment, stated that Boubyan Bank’s issuance of additional Tier 1 Sukuk represents a significant addition to Kuwait’s Islamic capital markets, reflecting the development of the local market and its capacity to absorb capital instruments compliant with Islamic Sharia and denominated in Kuwaiti dinars. It also underscores the bank’s standing among local and regional investors. He added, “We are proud of Boubyan Capital’s participation in this transaction as a co-bookrunner and its contribution to the success of the offering, which was exclusively targeted at qualified institutional and professional investors, providing them with the opportunity to invest in a capital instrument issued by one of Kuwait’s leading banking institutions.” Al-Gharbali noted that this participation aligns with Boubyan Capital’s growing role in connecting issuers with capital sources through public or private offerings and structured solutions, alongside expanding its involvement in landmark transactions that contribute to developing capital markets and enhancing the diversity of their investment instruments.

Issuance Arrangements

Boubyan Bank obtained the necessary regulatory approvals for the Sukuk issuance last August. KAMCO Investment served as the sole bookrunner, while Boubyan Capital Investment (S.A.K.) acted as the co-bookrunner.