Daewoo E&C, Kuwaiti banks sign $250 mn loan agreement

Daewoo Engineering & Construction Co. has signed an agreement to take on a $250 million loan from three Kuwaiti banks, Al Ahli Bank of Kuwait (ABK), Commercial Bank of Kuwait (CBK) and Burgan Bank, the South Korean construction major said on Thursday.

The three-year loan will be used for Daewoo E&C’s business operations in the Middle East.

“Kuwait has long been a cornerstone of Daewoo E&C’s financing portfolio. We look forward to strengthening our strategic partnerships with financial institutions in the Middle East to become a global construction powerhouse,” said Lee Yong-hee, Daewoo E&C’s finance division head.

The deal follows the construction firm’s bond sale worth 150 million Singapore dollars ($112.5 million) earlier this month. The five-year senior unsecured bonds with a 3.88% rate were guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank.

The bonds rated AA by S&P Global Inc. were 2.87 times oversubscribed. Daewoo E&C will use the proceedings for Singapore Land Transport Authority projects, focused on expanding the Mass Rapid Transit network.

Before that, Daewoo E&C sold $100 million worth of sukuk, or Islamic bonds, in May and another $100 million in July of last year via Kuwait’s Warba Bank. It was the construction company’s first sale of Islamic bonds in the US currency.

Write to You-Jung Lee at yjlee@hankyung.com

Jihyun Kim edited this article.