NBK Capital Global Coordinator and Joint Arranger in USD3.0bn GMTN Programme

Kuwait: June 4, 2017

  • 2.9x oversubscription with an order book above US$ 2.2 billion
  • The issuance received strong support from the local market with interest from both government and financial institutions
  • First Reg S/ 144A format Middle East bank issuance since 2009

Watani Investment Co. K.S.C.C. (“NBK Capital”) acted as Global Coordinator and Joint Arranger in the establishment of a Global Medium Term Note (“GMTN”) Programme up to the amount of US$ 3.0 billion by NBK SPC Ltd. (the “Programme”) and its debut issuance of US$ 750 million senior unsecured 5-year notes maturing May 2022. The Programme is unconditionally guaranteed by the National Bank of Kuwait S.A.K.P. (“NBK”), the largest and highest-rated bank in Kuwait (Aa3 by Moody’s, A+ by S&P and AA- by Fitch).

2.9x oversubscription with an order book above US$ 2.2 billion

NBK Capital, Citigroup Global Markets Limited, HSBC Bank plc and J.P. Morgan Securities plc acted as Global Coordinators while NBK Capital, Citigroup Global Markets Limited, HSBC Bank plc, J.P. Morgan Securities plc, Standard Chartered Bank and First Abu Dhabi Bank acted as Joint Arrangers.

The issuance was very well received by both regional and international investors, with the global order book peaking in excess of US$ 2.5 billion. The global order book closed at US$ 2.2 billion after price revisions translating to an oversubscription of around 2.9x. US-based investors dominated the deal with a 57% share of the issuance, followed by MENA investors at 26%, European investors at 13% and 4% from Asia.

The issuance will be used to further boost NBK’s foreign currency liquidity and to diversify funding sources.

This transaction marks the first issue since 2009 from a Middle East bank to target the US market under Rule 144A of the US Securities Act as NBK targets a larger institutional investor base as part of its aim to diversify funding sources.

Mr. Isam Al Sager, NBK Group’s Chief Executive Officer commented: “We are very proud of our debut issuance under our newly established GMTN Programme, which marks our third successful transaction in the global debt capital markets. We are especially proud of the strong investor reception, which is a true testament to the quality of NBK Group’s credit. Furthermore, this issuance represents a landmark transaction that will serve as a vital benchmark for upcoming Kuwaiti banks’ issuances in the global debt capital markets.”

Mr. Faisal Al Hamad, NBK Capital’s Chief Executive Officer added: “We are incredibly honored to have advised NBK Group on this international issuance. The overwhelming demand from global investors is a direct reflection of NBK’s solid global reputation. Furthermore, 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.”

The 5-year senior unsecured notes were priced competitively at 99.491% with a coupon of 2.75% and a spread of 100 bps over the 5-year mid-swap rate, returning a yield-to-maturity of 2.860%. The notes carry a rating of Aa3 by Moody’s and AA- by Fitch, in line with NBK’s ratings, highlighting the underlying credit strength of NBK.