KIPCO repays KD 70.5 million medium term note |
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KUWAIT CITY: KIPCOKIPCO
-- the Kuwait Projects CompanyKuwait Projects Company -- announced that it has repaid the €200 million (KD 70.5 million) medium term note the company issued in December, 2006 under its $2 billion Euro Medium Term Note (EMTN) Programme. The two year floating rate note matured on November 27th, 2008 and was listed and traded on the London Stock Exchange. The issue was bought by a wide range of banks, fund managers and insurance companies in the Gulf, Europe and Asia. The repayment of this EMTN bond follows KIPCOKIPCO's repayment on 12th November this year of a KD 15 million ($55 million) bond. The company said its practical and preemptive approach to liability management has helped it meet maturing debt obligations without adversely impacting its cost of borrowing.
KIPCOKIPCO's leverage and debt service ratios remain well within the guidelines set by international credit rating agencies. As of Nov 27, 2008, the company's net debt is well below the 25% maximum stated by Standard & Poors' in its last ratings report on KIPCOKIPCO. The company does not have to make any principal repayments until November 2009 and the average maturity of KIPCOKIPCO's debt is now 2.3 years. The company's multiple of cash to short-term debt is 5.3x.
Commenting on the EMTN repayment, KIPCOKIPCO's Executive Vice Chairman, Mr Faisal Al Ayyar, said:
"KIPCOKIPCO had prudent funding policies in place before economic circumstances made them necessary for everyone else. As a result, we have not faced the kind of liquidity problems the current financial crisis has inflicted upon many of the world's leading companies. This is because we have always focused on the long-term funding of our business. The average life of our debt is over two years whereas most of our surplus cash is invested for one month or less. By managing our affairs in such a conservative way and extending the maturity profile of our borrowings in good times, we are now reaping the benefits of our strategy to our advantage."
KIPCOKIPCO was one of the first private-sector companies in the Gulf region to tap the international capital markets through an EMTN programme. The programme enables the company to diversify its funding sources, reduce its cost of funds and extend the average life of its borrowings. In addition to this issue, KIPCOKIPCO has another $350 million note under the programme due in April, 2011. The programme is still active and may be used by KIPCOKIPCO in the future when market conditions are favourable.
© Arab Times 2008
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