Kuwait’s Equate Petrochemical Co plans to issue 10- and 30-year US dollar-denominated bonds and five-year sukuk, according to an investors’ note seen by Reuters, in what would be the first international debt issuance from the Gulf in more than a month, said a Reuters report.

The deal will be of benchmark size, which generally means at least $500 million per tranche.

Bond sales from the Gulf have faltered due to the coronavirus pandemic and a sharp fall in oil prices. Some have been shelved, including sukuk, or Islamic bonds, planned by Dubai Islamic Bank.

Equate hired Citi, JPMorgan, KFH Capital, MUFG and NBK Capital to lead the deal. First Abu Dhabi Bank, HSBC, Mizuho and SMBC Nikko are also on the deal.

The banks are arranging a series of calls with global investors that began on Monday, to be followed by the three-tranche transaction, subject to market conditions.

The pandemic is also complicating bond roadshows.

“Someone was going to go first I guess!” a Dubai-based fund manager said. “Not the ideal industry - so that’s a bit of a surprise.”

The yield on Equate Petrochemical 10-year dollar bonds due in 2026 had climbed to 4.6 per cent from 2.8 per cent on March 6, when talks between Opec and other oil producers over coordinated output cuts aimed at supporting crude prices collapsed.

The yield on its five-year dollar bonds due in 2022 jumped to 4.6 per cent from 2.4 per cent in the same period, Refinitiv data showed.

Equate Petrochemical is 85 per cent owned by the Dow Chemical Company and Petrochemical Industries Company, a subsidiary of government-owned Kuwait Petroleum Corporation. It is part of the Equate Group, a global producer of petrochemicals and the world’s second largest producer of ethylene glycol (EG).

The Equate recently started production of the first successful batch of Viridis 25 – a new food-grade polyethylene terephthalate (PET) by Equipolymers (EQP), which uses up to 25 per cent chemically recycled PET as feedstock, significantly reducing the need for virgin PET, thereby helping close the loop in the circular economy.

“We continue to progress in our journey to lower our carbon footprint with world class manufacturing facilities and producing a 25 per cent chemically recycled PET is a significant milestone,” said Naser Aldousari, Senior Vice-President at the Equate Group.

“It was a collaborative effort between the petrochemical and commercial business communities, and as a result Viridis 25 will have far-reaching environmental, social and business benefits.”

Viridis 25 is now available in the market through the Equate Group’s subsidiary Equipolymers and will primarily target the European market.

Muayad Al Faresi, Global Business Director, PET at EQP said: “There is strong demand for PET bottles, and our mission is to provide a sustainable product that meets quality of life and public health needs. Chemical recycling technology has opened new horizons for the plastic industry, enabling us to address the increasing environmental impact and waste concerns in a sensible and sustainable way. EQP has tapped into this opportunity, making it a focus area to foster future innovation.”