Co plans to use returns to restructure debts
KUWAIT CITY: The successful issuance of these bonds is a direct reflection of the confidence local financial institutions and investors have in both the middle income residential real estate sector and in the professionalism and caliber of our Company, said AlArgan's Chairman and Managing Director, Khalid Khudair Al Mashaan, as he spoke Wednesday at the C-Club, Bedea in Salmiya at a press conference announcing the issuance of KD 26.5 million bonds for ALARGAN International Real Estate Company.
The multi-million Dinar bond for Al-Argan International Real Estate Company announcement which was made in cooperation with KIPCO Asset Management Company (KAMCO), Burgan Bank and Kuwait Financial Centre (MARKAZ), comes on the heels of the recovery of the local real estate companies' bonds market - which has not had a bond issuance since June 2010.
Ratings
Furthermore, the bonds have been rated BBB- by the ratings agency "Capital Intelligence". The maturity period for these bonds is 5 years and is issued in two Tranches; the first tranche worth KD 23.2 million has a fixed annual interest rate of 6.25%. The second Tranche worth KD 3.3 million has a floating annual interest rate of 3.50%, well above the Central Bank of Kuwait discount rate which currently stands at 2.50%, and is capped at 7.00%.
The Company's Chairman and Managing Director, Khalid Khudair Al Mashaan, Al Khudair commented saying, "The successful issuance of these bonds is a direct reflection of the confidence local financial institutions and investors have in both the middle income residential real estate sector and in the professionalism and caliber of our Company.
Al Argan plans to use the bond issue's returns to restructure some of its short term debts, as well as finance its wide portfolio of business activities in Saudi Arabia, Oman, and Bahrain." He concluded by thanking the investors for their constant support and enduring trust.
For his part, CEO and Managing Director of KAMCO, Sadoun Abdullah Ali, commented that his outfit is very proud to have taken part and lent their assistance and expertise to such a project believing that the bond market will bring forth significant returns to all investors.
What's more, he added, Al Argan's track record is paved with success, which has afforded it the experience and know-how to maneuver its business to suit the environment. "We at KAMCO have a firm interest in the development and support of the issuance of bonds and sukuks to diversify debt restructuring instruments to local businesses", he noted. Ali also stated that this in turn will help stabilize the economic and real estate state-of-being in the Kuwaiti capital market.
Ali extended his gratitude to all subscribers for their help in making the issuance a success, as well to the governmental institutions supportive of the private sector locally, and to all other companies that have provided support to develop the local bond issuance market.
Speaking for Markaz, CEO Manaf Al Hajeri stated that, the synergy between Markaz, Al Argan, KAMCO and Burgan has resulted in the issuance of bonds at a crucial time, adding that his outfit was pleased to have contributed to the launch which is an indication of the importance of the development of the local bond market, whether it be through primary issuance restructuring or via the secondary market.
Al Hajeri stated that his outfit regularly publishes research reports on all aspects of the bond market and concluded adding that, "We aim to support all institutions in Kuwait with frozen bonds in order to encourage local issuances."
Burgan Bank's Senior General Manager in charge of Investment Banking and Treasury, May Al Mudhaf, also chipped in saying that over the last period, Burgan provided financial assistance to successful companies such as Al Argan, adding that the issuance of these bonds encourages companies with solid financial position to issue bonds, sukuks, and even bank loans to offer companies providing the solvency they need.
Established in 1994, Al Argan International Real Estate Company is a leading real estate developer specialized in affordable housing with an operating capital of over $95 Million. It has grown into a publicly listed company on the Kuwait stock exchange with approximately $2.4 Billion in assets under its management. As a result of its excellent track record and success, Al Argan began to expand into other countries in 2003 and currently has fully operating affiliates in Oman, Saudi Arabia and the Bahrain. Al Argan have also established development offices in the United Kingdom, Egypt and Lebanon.
© Arab Times 2012
