NBK Capital Acts as Dealer Manager for NBK’s Tender Offer

Kuwait: March 04, 2021

Watani Investment Co. K.S.C.C. (“NBK Capital”) acted as Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager for the National Bank of Kuwait S.A.K.P’s (“NBK” or the “Bank”) US$ 700 million Rule 144A / Regulation Perpetual Non-Call 6-year Tier 1 Capital Securities (the “Capital Securities”) issuance. NBK Capital was also appointed as Dealer Manager on the tendering of NBK’s US$700 million AT1 capital securities issued in 2015 and callable in April 2021.

The Capital Securities offer semi-annual coupon payments set at 3.625% per annum and have a first reset date on 24 February 2027, before which the securities can be called at any point during the 6-months prior or on any interest payment date thereafter.

The issuance represents NBK’s second AT1 issuance under both Regulation S  and Rule 144A formats, asserting itself as the only global Tier 1 Capital issuer in the region. The Bank’s 144A issuer status, allowed NBK to expand its investor pool to include US investors.

A diverse global investor base participated in the issuance, with the order book peaking at US$ 1.9 billion (2.7x oversubscription) from 169 investors. The robust demand for the issuance allowed NBK to price the lowest conventional US$-denominated Basel 3 AT1 coupon amongst all conventional MENA financial institutions.

The transaction achieved a globally diverse order book lead by US investors at 30%, followed by MENA investors at 27%, European investors at 23%, UK investors at 12%, while Asia Pacific investors accounted for 8%.

Asset Managers dominated the placement, making up 46%, followed by Banks and Private Banks at 28%, then Social Security Agencies, Pension Funds and Insurance companies at 21%, while other types of investors made up 5%.

The Capital Securities obtained a “Baa3” rating by Moody’s, and their proceeds will be used by NBK to further enhance its capital adequacy levels in addition to funding of the Bank’s tender offer for the US$700 million AT1 capital securities callable in April 2021.

Mr. Faisal Al Hamad, NBK Capital’s Chief Executive Officer stated: “We are honored to once again advise NBK Group towards successfully concluding yet another landmark transaction. NBK’s ability to shore up capital from around the world is a testament to the Bank’s global reach and leading regional position”.

Mr. Fares Hammami, NBK’s Executive Director and Head of Investment Banking added, “We are proud to have supported NBK on its sixth capital bonds or capital securities issuance, having raised more than US$3 billion in Tier 1 and Tier 2 capital since 2015. With this transaction NBK has proven its ability to manage outstanding debt capital market instruments, further solidifying its track record as a leading global issuer”.

NBK Capital is a leading advisor and arranger of debt securities in the region, having advised on more than US$24 billion of global and local conventional and Islamic debt capital markets mandates and restructuring assignments to date.

NBK is one of the leading banks in Kuwait and the largest by total assets, customer deposits and customer loans and advances. The Bank continues to maintain a rating of A1 by Moody’s, A by S&P and AA- by Fitch.