19 November 2015
To boost Tier 2 Capital under Basel III

The issuance attracted an oversubscription rate of 2 times

Al-Sager: We are proud to be at the forefront of developing the Kuwait and MENA fixed income markets

The strong demand reflects high investor confidence

This is the first investment grade rated (Baa1 by Moody's) Basel III-compliant, Subordinated Tier 2 bond issuance in the MENA region

National Bank of Kuwait S.A.K.P. (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 over-subscription 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 US$700 million Additional Tier 1 Capital Securities in April 2015, represents the Bank's first KD-denominated debt capital markets issuance.

Watani Investment Company K.S.C.C. ("NBK Capital") and KAMCO Investment Company K.S.C.P. ("KAMCO") acted as Joint Lead Managers on the transaction.

-Ends-

About National Bank of Kuwait (NBK):
NBK was founded in 1952 as the first indigenous bank and the first joint stock company in Kuwait and the Gulf Region. NBK reported profits of USD 894.2 million (KD 261.8 million) for 2014 which was among the highest in the Arab region. NBK's total assets were USD 74.4 billion (KD 21.8 billion) at the end of 2014, while shareholder equity stood at USD 8.6 billion (KD 2.5 billion).

NBK is the largest financial institution in Kuwait with effective market dominance in the commercial banking market and has been consistently awarded the highest credit rating of all banks in the region from Moody's, Standard & Poor's, and Fitch Ratings. NBK also stands out in terms of its local and international network, which includes branches, subsidiaries and representative offices in China, Geneva, London, Paris, New York, and Singapore alongside its regional presence in Lebanon, Jordan, Egypt, Bahrain, Saudi Arabia, Iraq, Turkey, and the UAE.

NBK's Long-Term Rating:

·         Moody's                                 Aa3

·         Fitch Ratings                         AA-

·         Standard & Poor's               A+

For more info, please contact Media Relations on:
Sanaa Al-Ghoussayni
Tel: 2259 2817
Fax: 22595804
Email: SanaaGhoussayni@nbk.com-
www.nbk.com  

© Press Release 2015