National Industries Group Holding, which has $475 million of Islamic bonds maturing in August, is seeking a four-year extension on the sukuk maturity as the Kuwaiti investment company raises financing for repayment.
The company is seeking to amend the periodic distribution from floating to fixed at a rate of 4.5 percent payable semi-annually on Feb. 16 and Aug. 16, National Industries said in a statement distributed via the Regulatory News Service. Citigroup Inc. is managing the process and consent solicitation will expire Aug. 9, with a debt-holders’ meeting scheduled for Aug. 13 to seek their approval to extend the maturity to Aug. 16, 2016, it said.
A number of Kuwaiti investment companies have defaulted since the onset of the global financial crisis after the value of their assets collapsed and frozen debt markets prevented them from raising loans. Global Investment House KSCC, a investment bank that reorganized $1.73 billion of debt in 2009, said last month bondholders agreed to delay the maturity of its bonds, while Investment Dar Co., the owner of half of Aston Martin Lagonda Ltd., altered the terms on $5 billion of loans after defaulting in 2009.
Total debt of Kuwait’s more than 90 investment companies amounts to about 4.8 billion dinars ($17 billion), according to Bloomberg News calculations based on central bank data. The average yield on Kuwaiti debt was 6.3 percent on July 20, JPMorgan Chase & Co.’s CEMBI Broad Kuwait Blended Yield index shows. That compares with 2.2 percent in Saudi Arabia, 4.2 percent in the United Arab Emirates, 3.4 percent in Qatar and 4.9 percent in Bahrain, according to JPMorgan data.
National Industries is in the process of raising a three-year syndicated murabaha facility of more than 100 million dinars ($356 million) to pay “any early consent fee, any ineligible payments and the initial dissolution amount of 30 percent,” according to the statement. The company said May 20 it hired Warba Bank to raise Islamic financing of more than 100 million dinars.
The price on National Industries’ floating-rate sukuk due Aug. 16 fell 1.25 cents last week to 80 cents on the dollar, according to data compiled by Bloomberg. The shares have declined 21 percent this year compared with a less than 0.1 percent drop in the benchmark KSE Index.