NBK Capital Acted as one of the Joint Lead Managers for the Issuance of Burgan Bank’s US$500 Million Perpetual Tier 1 Capital Securities with a reoffer yield of 5.75%

Faisal Al-Hamad

Kuwait City, 7 July 2019 Watani Investment Co. K.S.C.C. (“NBK Capital”) acted as Joint Lead Manager for the issuance of Burgan Bank K.P.S.C’s (“Burgan” or the “Bank”) US$ 500 million Regulation S Perpetual Tier 1 Capital Securities (the “Capital Securities”). The reoffer yield of the Capital Securities is set at 5.75% and have a first call date set in 5 years from the date of issuance.
The issuance constitutes direct, unconditional, unsecured and subordinated obligations by Burgan, the second largest conventional bank in Kuwait, with credit ratings of A3/Stable from Moody’s, BBB+/Stable from S&P and A+/Stable from Fitch.

HSBC Bank plc and J.P. Morgan Securities plc acted as Global Coordinators, while NBK Capital, Bank ABC, Citigroup Global Markets Limited, Emirates NBD Capital Limited, First Abu Dhabi Bank P.J.S.C., HSBC Bank plc, J.P. Morgan Securities plc and Standard Chartered Bank acted as Joint Lead Managers.
The issuance was well received by both regional and international investors, with the global order book peaking at US$ 2.2 billion, translating to an oversubscription of around 4.4x. MENA-based investors dominated the deal with a 51% share of the issuance, followed by Asian investors at 22%, European investors at 14% and investors form the United Kingdom at 12%.
The issuance was undertaken to manage the Bank’s capital and long-term liquidity in accordance with Basel III and the Central Bank of Kuwait regulatory requirements.

The Capital Securities were priced at par (100.00%) with a competitive reoffer yield of 5.75% representing a spread of 400.7 bps over the 5-year US Treasury.
Mr. Faisal Al Hamad, NBK Capital’s Chief Executive Officer stated: “We are incredibly honored to have advised Burgan Bank on this international issuance. The significant demand from local as well as global investors is a reflection of Burgan’s solid track record in the international debt capital markets and the consistent global demand for Kuwaiti paper.

Mr. Rani Selwanes, NBK Capital’s Managing Director and Head of Investment Banking added: “The overwhelming demand from Kuwaiti investors reflects on the importance of the Kuwaiti market in supporting both regional and global issuances and reflects on NBK Capital’s ability to execute global transactions at the highest quality.”

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