Boursa Kuwait Opens Its Fixed-Income Market With KFH’s KWD 200 Million Tier 1 Sukuk

By The Edge Research Team

The Takeaway: Boursa Kuwait opened its fixed-income market on 10 November by listing Kuwait Finance House’s KWD 200 million of perpetual Additional Tier 1 sukuk, the first instrument on the platform. The mudaraba sukuk pay an initial profit rate of 5.50% a year, distributed semi-annually, until a first reset in May 2032. The exchange calls the listing a practical step toward a multi-asset market in which shares and fixed-income instruments together serve the national economy.

Kuwait Finance House’s perpetual sukuk, priced at 5.50% in May, became the first listing on Boursa Kuwait’s fixed-income platform, giving the exchange a market for debt beside its equities.

Boursa Kuwait opens a trading board for bonds and sukuk

The exchange said in a statement on Tuesday, carried by the Kuwait News Agency, that the listing, the first on its platform for bonds and sukuk, launches a new asset class and strengthens its role as operator and developer of Kuwait’s capital market.

It described the step as part of its strategy to become a multi-asset market, where shares and fixed-income instruments together serve the national economy. Institutions gain another way to diversify their funding, and investors gain instruments that differ in rights, distributions and structure.

Chairman Bader Al Kharafi said that with this listing the exchange activates a new asset class and anchors its role in leading the move to a multi-asset market, creating “a new path that links capital with investment opportunities”.

Chief Executive Mohammad Al-Osaimi said the exchange prepared its systems and its listing and trading procedures for these instruments, and set aside a separate trading board for them. It coordinated clearing and settlement with the Kuwait Clearing Company and worked with brokers to make dealing easier.

Data on each listed instrument and its disclosures are central to running the market, Al-Osaimi said, because distribution dates, redemption terms and other features differ from one issue to the next. In the next phase the exchange plans direct contact with issuers, their advisers and issue managers to settle technical questions before applications are filed.

Hamad Abdulmohsen Al-Marzouq, chairman of Kuwait Finance House, called the listing and trading of the sukuk a historic achievement for Kuwait’s capital market. Group Chief Executive Khaled Yousef Al-Shamlan said it gives investors a new asset class beside shares and listed real estate funds, with KFH acting as issuer and arranger.

The market regulator clears the first sukuk listing

The Capital Markets Authority approved the listing on 5 November, on Boursa Kuwait’s recommendation. The issuer, KFH Tier 1 Sukuk 3 Limited, and Kuwait Finance House as obligor must comply with the executive bylaws of Law No. 7 of 2010 and the exchange’s rulebook.

The regulator described the listing as the first of sukuk on Boursa Kuwait and “a significant milestone in the development of the debt capital market”. KFH’s own disclosure of 8 November called it the first listing of debt instruments on the exchange.

The exchange’s rulebook and its Resolution No. 1 of 2026 set the conditions for listing. They include a minimum issue value of KWD 100,000, approval of sukuk by an external Sharia audit office and a committee of holders.

Listed issuers then disclose on a page dedicated to each instrument, including its maturity and the dates on which returns are paid. Minutes of each holders’ meeting go to the exchange within five days.

The exchange’s own guidance says Kuwaiti and international companies, public institutions and banks can raise funds through listed bonds or sukuk. Kuwait’s government gained its own power to issue sukuk under Law No. 90 of 2026, as set out here on 10 October.

The sukuk pay 5.50% until a first reset in May 2032

Kuwait Finance House priced the issue on 13 May and settled it on 20 May. The bank had announced the regulator’s approval of the issuance in a disclosure dated 7 April.

The sukuk are perpetual and qualify as Additional Tier 1 capital under the applicable regulatory requirements. They follow a mudaraba structure under English law, with KFH Capital as global coordinator, and are listed under the ticker KFH T1S3.

The initial profit rate of 5.50% a year is paid in semi-annual distributions on 20 May and 20 November, under the offering circular of 18 May 2026. At that rate, a full year’s distributions on KWD 200 million would come to KWD 11 million if paid in full, on The Edge’s calculation.

The rate runs to the first reset date of 20 May 2032 and is then reset every six years at the reset rate plus a margin of 2.00%. The bank may call the sukuk from 20 November 2031, the first call date, subject to the conditions of the issue.

The circular also sets out the loss-absorbing terms of Additional Tier 1 capital. Distributions are cancelled if a non-payment event occurs and are otherwise at the bank’s sole discretion, and any amount not paid does not accumulate. If a non-viability event occurs, the sukuk are cancelled or written down in whole or in part.

Terms of the KWD 200 million Additional Tier 1 sukuk

Terms from Kuwait Finance House’s disclosure of 20 May 2026 and the offering circular of 18 May 2026; ticker as listed on the exchange.

KFH adds two Tier 1 sukuk and redeems two older ones

The dinar issue is the second Additional Tier 1 sukuk that the bank’s disclosures tie to approvals from the central bank and the market regulator in November 2025, for $1.5 billion or its equivalent.

The first, a dollar issue of $850 million through KFH Tier 1 Sukuk 2 Limited, was priced on 13 November 2025 at a profit rate of 6.250%. Its first reset falls on 20 November 2030.

The bank’s filings express the dinar issue as $650 million. With the dollar issue, that matches the $1.5 billion approval, on The Edge’s calculation.

In the nine months to September, the bank exercised its call option and redeemed in full a $750 million Perpetual Tier 1 sukuk and a $600 million Additional Tier 1 sukuk. Its interim accounts say neither was outstanding at 30 September.

Perpetual Tier 1 sukuk in KFH’s equity stood at KWD 461.7 million at 30 September, from KWD 641.3 million at the end of 2025. A year earlier the line was KWD 381.3 million.

Perpetual Tier 1 sukuk in Kuwait Finance House’s equity (in KWD millions)

From the interim condensed consolidated statement of financial position at 30 September 2026; the December 2025 figure is audited.

The new dinar issue is equal to 43.3% of the September balance. The line is 21.1% above its level a year earlier.

In The Edge’s reading, listing a dinar bank capital instrument on the local exchange, after it settled in May without a listing, gives Kuwaiti investors a regulated venue in which a price can form; how much secondary trading the new board attracts will be the test.

What to watch: The first scheduled distribution on the sukuk falls on 20 November 2026, under the terms of the offering circular.

Figures are from Boursa Kuwait’s statement of 10 November 2026 as carried by the Kuwait News Agency and its listing page for the sukuk, the Capital Markets Authority’s press release of 5 November 2026, Kuwait Finance House’s disclosures on Boursa Kuwait of 10 and 16 November 2025, 8 April, 20 May and 8 November 2026, the offering circular of KFH Tier 1 Sukuk 3 Limited dated 18 May 2026, and the bank’s interim condensed consolidated financial information at 30 September 2026; quotations from the Arabic statement are The Edge’s translation; percentages and comparisons not attributed to a source are The Edge’s calculations.

Sources: Boursa Kuwait, Kuwait Finance House, Capital Markets Authority, Kuwait News Agency, The Edge.

Get Complimentary Insights

Follow us