DUBAI - Kuwait's Burgan Bank has received preliminary approval from the central bank to issue up to $500 million in senior unsecured bonds, the lender said in a stock exchange filing.

The bonds will be issued under Burgan's Euro Medium Term Note Program. They will either have a tenor of five years with a fixed coupon rate or a six-year tenor with an option to redeem the bonds after five years. The six-year option would have a fixed coupon rate for five years then a floating rate for its final year, should the bank not "call" the bonds.

Closing the bond sale will allow Burgan "to reinforce its long-term liquidity and regulatory liquidity ratios," it said in the filing.

Sales of senior bonds are relatively rare from the Gulf's banks, but Burgan's debt-raising plans follow the country's biggest lender, National Bank of Kuwait, securing $1 billion last week via six-year senior bonds non-callable for five years.

NBK sold the bonds at 90 basis points (bps) over mid-swaps, tightening 20 bps from initial guidance after demand peaked at around $1.9 billion.

The oil-rich region's banks have closed a string of Additional Tier 1 (AT1) bond sales this year versus comparatively sparse senior bond issues, taking advantage of historically low rates to shore up core capital, with several breaking pricing records.

AT1 bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature but can be redeemed by an issuer after a specified period.

Burgan Bank raised $500 million in December with subordinated Tier 2 bonds. It also has $500 million in outstanding AT1 bonds with a first call date in 2024.

(Reporting by Yousef Saba; Editing by Toby Chopra) ((; +971562166204;