Gulf Insurance opens KWD 100 million Tier 2 perpetual bond sale

Summary

• Gulf Insurance Group opened subscription for perpetual Tier 2 bonds of up to KWD 100 million.
• Pricing is set at a margin over Kuwait's central bank discount rate, currently 3.50%.
• The sale refinances 2021 bonds and sets a cost benchmark for Gulf insurers.

The latest

Subscription opened on 18 October 2026 for new perpetual Tier 2 capital bonds of up to KWD 100 million, about USD 324.7 million at the published rate of 0.308 dinars per dollar. Gulf Insurance Group told Boursa Kuwait that the Capital Markets Authority approved the prospectus, and that the issue comes alongside the redemption of the insurer's outstanding 2021 bonds.

Details

• The size: According to the supplementary disclosure filed with Boursa Kuwait, the issue is capped at KWD 100 million of perpetual debt bonds classified within Tier 2 capital. At the rate of 0.308 dinars per dollar published on the same day, that ceiling is equivalent to roughly USD 324.7 million.
• The timetable: The company said subscription opens on 18 October 2026 and closes, together with allocation, on 29 October 2026. The issue date, which coincides with the buy-back of the 2021 bonds, is set for 5 November 2026, while the first call date on the 2021 paper falls on 10 November 2026.
• The pricing: The group said the issue is expected to comprise two tranches, one carrying a fixed rate and the other a floating rate. Each tranche is to be priced at a margin over the Central Bank of Kuwait discount rate, currently 3.50%, with final rates tied to the discount rate announced on the issue date itself.
• The margin: The insurer did not disclose the size of the margin over the discount rate for either tranche, nor the split of the ceiling between the fixed and floating portions. Those terms are left to the pricing that follows the close of subscription and allocation.
• The refinancing: The new paper is paired with the redemption of bonds the group issued in 2021, making the transaction a replacement of existing subordinated capital rather than a net addition. The company did not publish the coupon or outstanding amount of the 2021 issue.
• The arranger: KAMCO Investment Company was appointed sole issue manager and structuring adviser for the transaction, according to the disclosure. No other banks or placement agents were named in the filing.
• The regulators: Two approvals sit behind the sale. The Insurance Regulatory Unit cleared both the issue and the redemption of the outstanding bonds on 1 October 2026, which the group disclosed on 12 October 2026, and the Capital Markets Authority subsequently approved the prospectus.
• The company line: Gulf Insurance Group, which trades on Boursa Kuwait under the ticker GIG, said there is no financial impact on its financial position at present. The statement did not quantify the effect of the refinancing on the group's solvency or capital ratios.

Background

Tier 2 perpetual instruments count toward an insurer's regulatory capital base rather than ordinary borrowing, which is why they require clearance from both the insurance regulator and the capital markets authority before any prospectus can go to investors.

Between the lines

Because the coupons are anchored to a 3.50% discount rate fixed on the issue date, the final cost is decided by monetary policy rather than by the bookbuild alone. A listed insurer refinancing subordinated capital at a disclosed spread over that benchmark effectively publishes a reference price that other Gulf insurers weighing similar issues will be measured against.

What's next

Allocation and final pricing of both tranches on 29 October 2026, then the issue and buy-back of the 2021 bonds on 5 November, followed by the first call date on 10 November.

Source: Boursa Kuwait, KUNA