The Commercial Real Estate US$ 100 Million Sukuk Offering Opens For Subscription

THE COMMERCIAL REAL ESTATE US$ 100 MILLION SUKUK OFFERING OPENS FOR SUBSCRIPTION
Kuwait, Manama, 18 April 2005 - It was announced today that the offering of the fully underwritten US$ 100 million issue of Islamic Ijara Sukuk (Leasing Bond) for The Commercial Real Estate Company has been opened for subscription as reported by the Arranges and Structuring Advisors; Kuwait Finance House (KFH), Liquidity Management Centre (LMC) and Kuwait Financial Centre (Markaz).

The Ijara Sukuk represents the first Islamic Shari’a compliant Sukuk offering in Kuwait, arranged for the Commercial Real Estate Company (CRC) in support of its growing real estate development projects in Kuwait and the region. CRC is the largest publicly listed real estate company in Kuwait with its business operations being conducted in accordance with the principles of the Islamic Shari’a.

The Ijara Sukuk has been structured as lease-to-own Islamic Shari’a compliant securities with a five year term maturing in 2010 and offering a semi-annual return on the Sukuk of 125 basis points over US Dollar 6 months LIBOR. The Sukuk is the first offering of a rated corporate Sukuk issue that has been assigned a rating of “A-” by Capital Intelligence. The Sukuk offering has been approved by the Bahrain Monetary Agency and is expected to be listed on the Bahrain Stock Exchange shortly. The underwriting group for the issue was led by Kuwait Finance House as Senior Lead Manager and Boubyan Bank as Lead Manager. The managers are Emirates Islamic Bank, Gulf Investment Corporation, Kuwait Financial Centre and Liquidity Management Centre.

Commenting on the announcement, Mr. Abdulftah M. R. Marafie, Chairman and Managing Director of Commercial Real Estate Company said, “We are very delighted for the completion and success issuing of CRC Sukuk, and I would like to extend my sincere thanks to Markaz, LMC and KFH for their great and professional performance in arranging, placing, and underwriting the Sukuk, and would like to thank the lead underwriters; Boubyan Bank, Gulf Investment Corporation and Emirates Islamic Bank for their strong confidence in CRC”.

Mr. Mohamed Sulaiman Al Omar, Deputy General Manager of Kuwait Finance House, commented on behalf of the underwriting group said, “KFH is once again leading another Islamic financing transaction using the Sukuk as a mode of finance, yet being in our home country. KFH commitment towards this Sukuk issue reflects its continuing support for its client CRC with who we have a long and strong business relationship. We are hoping that with the cooperation and collaboration of local and regional financial institutions, future Sukuk issues would be offered shortly out of Kuwait which would further contribute to the development of the economies in the region”. Mr. Al Omar added, “Our thanks go to our esteemed client CRC, the underwriting financial institutions, Markaz and LMC”.

Mr. Yaquob Yousif Al Muziani, Chairman and Managing Director of Boubyan Bank stated that the bank’s participation in this deal represents one of many other Islamic finance deals that will contribute to the Kuwaiti economy that the bank intends to arrange in collaboration with market players and Financial Institutions. He also added that Boubyan Bank was one of the first to underwrite 25% of the CRC Sukuk Issue after deliberation and continuous study with the concerned parties such as Liquidity Management Centre in the Kingdom of Bahrain. He concluded that the bank would offer creative and distinguished styles to the Sukuk and various Islamic financial instruments market in the future.

Mr. Diraar Yousif Alghanim, Chairman and Managing Director of Kuwait Financial Centre, the financial advisors to CRC added, “We would like to take this opportunity to thank CRC for appointing Markaz as their Financial Advisor, enabling us to have a global look at their financial structure, business plan, and strategy, for which we advised them to come up with a Sukuk issue”.

Mr. Ahmed Abbas, Chief Executive Officer of LMC commented that, “We are pleased at our selection to structure this Sukuk issue, and are delighted to have been closely working with both KFH and Markaz on the arrangement and placement of this deal for a very high profile name such as CRC, that is consider to be the first for LMC in Kuwait”. Mr. Abbas added, “We would like to thank our shareholder Kuwait Finance House as well as the lead underwriting institutions; Boubyan Bank, Emirates Islamic Bank and Gulf Investment Corporation for the overwhelming support extended to LMC for the arrangement of this Sukuk issue”.

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