International investors' lending to KIPCO reaches US $500 Million

The KIPCO EMTN, listed on the London Stock Exchange, is the first time a private sector Corporation from the Middle East has completed such an issue. The KIPCO EMTN - made through a wholly-owned subsidiary - offered investors a rare opportunity to diversify from the US dollar Floating Rate Notes normally offered by banks in the Gulf region.

The first tranche of the programme was successfully launched despite a volatile market. On launch, the issue held firm and achieved US $225 Million in a tightly priced transaction of 90 BPS over 3 months LIBOR.

KIPCO's EMTN is a 5-year note fully tradeable on the London Stock Exchange. The proceeds of the note will be used to pay and prepay existing liabilities. Both KIPCO and the notes issued under the EMTN programme have been assigned a BBB-/Positive Outlook rating by rating agency Standard & Poor's.

The EMTN was distributed across the world: investors in the Middle East bought 49% of the issue, European investors 27%, Asian investors 18% and offshore USA accounts 6%. Banks and treasures purchased 73% of the note while fund managers bought 27%.

KIPCO's international investor roadshow in Europe, the Middle East and Asia produced significant interest in KIPCO's credit position and the EMTN programme. Mr. Faisal Hamad Al-Ayyar, KIPCO's Managing Director, said he was pleased with the feedback from the roadshow and that investors understand KIPCO's business strategy of asset diversification, sustainable growth and profitability.

KIPCO has been building relationships with international lenders across several markets over the past 18 months. This process began with a debut US $100 million 3-year syndicated loan in December 2004. This was followed in July 2005 by a US $175 million 5-year syndicated loan. The EMTN first tranche of US $225 million 5-year note fully meets KIPCO's objectives to reduce cost of funds, extend maturity, deepen its investor base and diversify its debt instruments.