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Gulf Insurance Group, one of the leading insurance service providers in the Middle East and North Africa, announced today the successful issue of KD60 million Perpetual non-call 5 subordinated Tier 2 bonds, representing its debut issuance in the debt capital markets.
The issue attracted a large number of local institutional and qualified investors and achieved an oversubscription in a short period, signifying GIG’s financial strength.
Kamco Invest, a regional non-banking financial powerhouse, 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% and floating coupon tranche with a coupon of 2.75% 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. GIG continues to benefit from a rating of “A” from S&P Global Ratings, “A (Excellent)” from A.M Best and A3 from Moody’s.
This bond issuance represents an important milestone in Kuwait’s capital market being the first bond issuance by an insurance company and the first perpetual bond issuance denominated in Kuwaiti Dinar.
Earlier this year, the Group had announced the completion of the acquisition of AXA's operations in the Gulf region, making Gulf Insurance Group one of the largest and most diversified insurance groups in the Mena region.
After the full integration of AXA's operations in the Gulf region, the Group's premiums are expected to reach approximately USD2.5 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 stable outlook.
Group CEO Khaled Saoud Al Hasan 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."
Kamco Invest CEO Faisal Mansour Sarkhou 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."
"This success would not have been achieved without the high professionalism and support of the Insurance Regulatory Unit and the Capital Markets Authority," he added.
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