NBK is­sues KD 125m 10-year Sub­or­di­nated Tier 2 bonds

Kuwait Times - - BUSINESS -

KUWAIT: Na­tional Bank of Kuwait SAKP (NBK), the largest bank in Kuwait (rated Aa3 by Moody’s, A+ by S&P and AA- by Fitch) suc­cess­fully is­sued KD 125 mil­lion, 10NC5, Sub­or­di­nated Tier 2, Basel III com­pli­ant bonds. The is­suance rep­re­sents the first in­vest­ment grade-rated (Baa1 by Moody’s) Basel III-com­pli­ant, Sub­or­di­nated Tier 2 bond is­suance in the MENA re­gion, high­light­ing the un­der­ly­ing credit strength of NBK.

The trans­ac­tion was well re­ceived by in­sti­tu­tional and high net worth in­vestors, with an over­sub­scrip­tion rate of 2 times. The is­suance pro­ceeds will be used to boost NBK’s Tier 2 cap­i­tal, as it has been ap­proved as fully el­i­gi­ble Tier 2 Cap­i­tal by the Cen­tral Bank of Kuwait (CBK) un­der its Basel III frame­work, and for gen­eral and cor­po­rate pur­poses. Isam Al-Sager, NBK Group Chief Ex­ec­u­tive Of­fi­cer com­mented“We are proud to be at the fore­front of fur­ther de­vel­op­ing the Kuwaiti and MENA cap­i­tal mar­kets by is­su­ing Sub­or­di­nated Tier 2, Basel III com­pli­ant Bonds. We are also very proud of the level of in­vestor con­fi­dence that was demon­strated by the over­sub­scrip­tion rate of 2 times” Al-Sager also added “This is­suance rep­re­sents a land­mark re­gional trans­ac­tion be­ing the first KD-de­nom­i­nated is­suance for the bank as well as the first in­vest­ment grade-rated (Moody’s Baa1) Sub­or­di­nated Tier 2, Basel III com­pli­ant Bonds in the MENA re­gion” The bonds, which have a 10-year tenor and are callable af­ter five years or on any in­ter­est date there­after, were priced at 100% and were is­sued in equal pro­por­tion be­tween fixed and float­ing-rate tranches.

Fixed-rate Bonds bear in­ter­est of CBK Dis­count Rate (at the date of is­suance) + 275bps per an­num for the first five years; this in­ter­est rate on the fixed rate tranche will re­set af­ter five years from the date of is­suance to the pre­vail­ing CBK Dis­count Rate (on the fifth year an­niver­sary of date of is­suance) + 275bps per an­num. Float­ing-rate Bonds bear in­ter­est of CBK Dis­count Rate + 250bps per an­num, and are capped at 1.00% above the in­ter­est paid on the fixed-rate Bonds. The trans­ac­tion, which fol­lows NBK’s $700 mil­lion Ad­di­tional Tier 1 Cap­i­tal Se­cu­ri­ties in April 2015, rep­re­sents the Bank’s first KD-de­nom­i­nated debt cap­i­tal mar­kets is­suance. Watani In­vest­ment Com­pany KSCC (“NBK Cap­i­tal”) and KAMCO In­vest­ment Com­pany KSCP (“KAMCO”) acted as Joint Lead Man­agers on the trans­ac­tion.

Isam Al-Sager, NBK Group

Chief Ex­ec­u­tive Of­fi­cer

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