Kuwait Petroleum Subsidiary Launches $1bn Loan

Kuwait Foreign Petroleum Exploration Company (Kufpec), a wholly-owned subsidiary of Kuwait Petroleum Corp, has launched a $1 billion loan into syndication, bankers said on Thursday.

The deal is being led by a consortium of international and local banks comprising Bank of Tokyo-Mitsubishi-UFJ, HSBC, JP Morgan, National Bank of Kuwait and Royal Bank of Scotland, the bankers said.

The five-year amortising term loan pays an interest margin of 130 basis points (bps) over Libor, one of the bankers said.

Kufpec was last in the market in June 2013 when it sealed a five-year $750 million deal paying a margin of 140 bps over Libor. That deal was led by Bank of Tokyo-Mitsubishi, HSBC, JP Morgan, National Bank of Abu Dhabi, National Bank of Kuwait and RBS.

It was increased, using an accordion feature, to $1 billion in January this year.

Kufpec could not be immediately contacted for comment.

Some loan bankers have questioned how the deal may perform given how quickly the borrower has returned to the market.

“I am not sure how this new deal will go. Appetite for another five-year deal so soon after the last might not be the same,” said one of the bankers.

However others argue that banks will be keen to take up the opportunity to lend to Kufpec.

“Appetite for the deal will be fine, Kufpec is a good name in the Middle East and with so few deals coming out of Kuwait, banks have plenty of country exposure left,” another banker said.