Kuwait’s Equate Petrochemical Co plans to issue U.S. dollar bonds and sukuk as early as Tuesday, four sources familiar with the matter said, reviving a debt issue that it postponed in late March due to volatile markets.
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Two of the sources said the issue would consist of five-year sukuk and 10-year conventional bonds in a benchmark issue, of at least $500 million.
In late March, Equate Petrochemical, a joint venture between U.S.-based Dow Chemical Company and a unit of Kuwait Petroleum Corporation, had planned to issue 10- and 30-year dollar-denominated bonds and five-year sukuk. It put off those plans after failing to secure the pricing it sought following huge volatility in the market, sources have said.
Equate Petrochemical did not immediately respond to a Reuters request for comment on the new deal.
“Tough sell in this market,” a fund manager said of the new deal, citing weak company results and a difficult industry backdrop.
One source said the banks selected for the original issue in March would arrange the issue.
The banks hired in March were Citi, JPMorgan, KFH Capital, MUFG, NBK Capital, First Abu Dhabi Bank, HSBC, Mizuho and SMBC Nikko.
Qatar, Abu Dhabi and Saudi Arabia raised a combined $24 billion in large bond issues last month, the first public debt issues in the Gulf since late February.
The primary market showed further signs of improvement last week when Bahrain, whose credit rating is junk status, raised $2 billion in a debt issue.
Abu Dhabi’s state fund Mubadala has hired banks for a potential three-tranche bond issue consisting of six-year and 10-year conventional bonds and 30-year dual-listed Formosa bonds, sources said on Monday. A banking source said the deal would launch on Tuesday.
Reporting by Yousef Saba and Davide Barbuscia
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