NBK prices $800 million in landmark Additional Tier 1 bond issuance
KUWAIT: National Bank of Kuwait (NBK) successfully priced a $800 million PNC6 Additional Tier 1 bond issuance (AT1)—its largest issuance to date in this capital tier—following strong investor demand.
The issuance was met with broad interest from global investors, marking a notable return to the GCC AT1 market after a brief pause that followed a concentrated wave of issuances in May. The issuance attracted strong demand, with subscription orders peaking at $2.2 billion—2.75x the issued amount—underscoring robust interest from a diversified pool of global investors and financial institutions. Private banks, in particular, played a pivotal role as key anchors during the orderbook building process. This overwhelming response reflects international investor confidence in NBK's solid credit profile and Kuwait's position as an attractive investment destination.
MENA-based investors accounted for 47 percent of total allocations, followed by investors from the UK (19 percent), the United States (18 percent), Europe (13 percent), and Asia (3 percent).
By investor type, asset managers and investment funds represented the largest share at 48 percent, followed by banks and private banking clients at 44 percent, while sovereign entities, insurance firms, and pension funds comprised the remaining 8 percent of total demand.
Robust investor demand enabled NBK to achieve highly favorable pricing for the issuance, with the final yield set at 6.375 percent—representing a 50 basis point tightening from the initial price thoughts (IPTs) of 6.875 percent (equivalent to UST+240.3bps). The investment-grade credit rating of the issuance, at Baa3 from Moody's, further enhanced its appeal—driving strong interest from international private banking platforms and global asset managers.
Citigroup, JP Morgan, HSBC, and Standard Chartered acted as Global Coordinators for the issuance, while the Joint Lead Managers included Citigroup, J.P. Morgan, HSBC, Standard Chartered, First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, KAMCO Investment Company, and National Bank of Kuwait.
The bonds, which will be listed on the London Stock Exchange, are expected to strengthen NBK's capital adequacy ratios. The new issuance was conducted in parallel with NBK's liability management exercise which offered holders of the Bank's outstanding $750 million Additional Tier 1 securities, issued on November 27, 2019, the option to roll their existing positions into the new offering.
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