NBK, KFH arrange KD 350 million 5-year syndicated facility for KPC

Facility comprises a conventional tranche at KD 210m and a Murabaha tranche at KD 140m

Salah Al-Fulaij and Mazin Al-Nahedh

KUWAIT: National Bank of Kuwait (“NBK”) and Kuwait Finance House (“KFH”) have co-arranged a five-year syndicated revolving loan and Murabaha facility at KD 350 million ($1.2 billion) for the state-owned Kuwait Petroleum Corporation (“KPC”).

NBK and KFH are acting as the initial mandated lead arrangers and book runners (“MLABs”) for the respective conventional and Islamic facilities on behalf of KPC. The facility comprised a conventional tranche at KD 210 million and a Murabaha tranche at KD 140 million. Signed on Oct 1, 2019, the facilities were fully underwritten by NBK and KFH and will be directed towards financing KPC’s day-to-day general corporate purposes.

A consortium comprising Burgan Bank, Gulf Bank, Al-Ahli Bank of Kuwait (“ABK”), and Commercial Bank of Kuwait (“CBK”) has joined the MLABs in arranging the conventional facility. Meanwhile, Boubyan Bank, Warba Bank, and Kuwait International Bank (“KIB”) joined the syndication of the Murabaha facility. The facility comes in line with Kuwait Petroleum Corporation’s 2040 strategy, which will enable KPC to become a global integrated, full-fledged oil and gas hub.

Commenting on the successful closure of the transaction, Salah Al-Fulaij, NBK – Kuwait Chief Executive Officer, said: “NBK continues to play a key role in arranging credit facilities for the oil sector companies, given its strong commitment to KPC and its subsidiaries.” “I am thankful for KPC’s continued trust in the local banking sector. I am equally thankful for the participating banks in supporting and arranging the facility, which mirrored the Kuwaiti banking system’s recognition of KPC’s solid financial position together with its strong management expertise, prudent risk management and overall growth strategy,” Al-Fulaij indicated.

“This deal also underscores NBK’s well-established presence, backed by its healthy balance sheet as well as its domestic dominance especially in the oil industry,” Al-Fulaij noted. Mazin Al-Nahedh, KFH Group Chief Executive Officer, commented: “KFH remains a key partner to KPC and its subsidiaries’ strategic plans to bolster the importance of the oil and gas sector. The sector represents Kuwait’s main resource and an important pillar of the State’s initiative in its 2035 vision. The successful close of KPC’s transaction reflects KFH’s prominent position in the Islamic finance space and its ability to lead, arrange, and finance mega transactions and developmental projects as well as its pioneering role in developing Sharia compliant financing products in conjunction with conventional financing tools.”

Al-Nahedh also extends his gratitude to all Islamic banks who participated in the Islamic tranche noting his confidence in the Kuwaiti banking sector and KPC’s strategies whilst stating KFH’s numerous participations in the same field.

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