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First callable structure for a senior unsecured (fixed to floating) bond from the CEEMEA region
The large demand from global fixed income investors led to a USD 1.7 billion final orderbook
NBK managed to execute four successful issuances in a period of 10 months
KUWAIT CITY, Sep 13: National Bank of Kuwait (“NBK” or the “Bank”) succeeded in issuing Rule 144A/Reg S USD 1.0 billion Senior Unsecured notes under the Bank’s USD 5.0 Global Medium Term Note programme, representing the largest USD denominated issuance amongst Kuwaiti financial institutions.
The issuance will further enhance the Bank’s liquidity position, while supporting relevant regulatory ratios and further diversifying NBK’s sources of funding.
Global investors’ confidence in NBK was further endorsed with the peak order book reaching USD 1.7 bn (1.7x oversubscribed).
The notes have a 6-year maturity and first call date after 5-years. The issuance is also the first fixed to floating callable structured senior unsecured notes from the CEEMEA region; pioneering an innovative solution to optimize their contribution to the Bank’s Net Stable Funding Ratio.
The robust global demand allowed NBK to price the notes at 95 bps over US Treasuries, the equivalent of a 1.726% reoffer yield. The notes were issued at a discount and had a final coupon of 1.625%, fixed with semi-annual coupon payments until their first call date, followed by a floating rate of SOFR + 105 bps paid quarterly thereafter.
The Issuance achieved a globally diverse orderbook; lead by US investors (43%) followed by Asia (26%), Europe (12%), Middle East (10%) and UK (9%). Asset Managers lead allocation at 69%, followed by Banks at 22%, while Governments, Insurance and Pension Funds combined for 9%;
The issuance represents NBK’s fourth issuance under both Rule 144A and Regulation S formats, asserting itself as the only global financial institution issuer in the region.
NBK Capital, Citigroup Global Markets Limited and J.P. Morgan Securities plc acted as Global Coordinators on the issuance. The Bank also appointed NBK Capital, Citigroup Global Markets Limited, HSBC Bank plc, J.P. Morgan Securities plc, Standard Chartered Bank, Goldman Sachs International, Merrill Lynch International, and MUFG Securities EMEA plc as joint bookrunners and joint lead managers. NBK Capital is a leading advisor and arranger of debt securities in the region, having advised on more than USD 32 billion of global and local conventional and Islamic debt capital markets mandates and restructuring assignments to date