Economy Update: Joint Loan Announcement
Kuwaiti Gulf Bank has announced the successful facilitation of a $650 million joint loan aimed at financing its general objectives. This transaction marks a significant milestone for the bank as its inaugural entry into the international joint loan markets.
The loan is characterized as unsecured, relying not on collateral or property, but rather on the borrowing company’s financial capacity to manage repayment obligations. This structure underscores the robustness of Gulf Bank’s financial standing and its creditworthiness.
In a statement on its official website, the bank emphasized that this development paves the way for “a sustainable and diverse financing path” by enhancing access to both regional and international joint loan markets.
Emirates NBD Capital, Ltd., served as the investment banking arm for Emirates NBD, and acted alongside Standard Chartered Bank as the international coordinators and principal arrangers, initial commissioners, and subscription managers of the loan. Each entity contributed both individually and collaboratively to the successful execution of these roles.
With Standard Chartered Bank fulfilling the roles of international coordinator and principal manager, the loan arrangement involved the participation of a select group of international and regional investors, leveraging a general distribution framework.
In light of this achievement, Walid Khaled Mandni, CEO of Gulf Bank, remarked, “The deal garnered significant interest from both international and regional banks, which empowered Gulf Bank to broaden its funding sources and diversify its investor base.”
He further noted that the demand for participation in the loan was exceptionally strong, allowing Gulf Bank to activate the “green limit” option that led to an increase in the facility amount to $650 million, exceeding the initial target of $500 million. Mandni emphasized that the success of this transaction reinforces Gulf Bank’s reputation as a pioneering financial institution in the region, distinguished by its strong local standing, high credit rating, and unparalleled financial strength.
The green limit option is a provision incorporated into certain financial agreements, such as public offerings or loans, which grants the lead bank or organizer the authority to expand the loan amount or subscription by a specified percentage after the completion of the initial transaction.
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