NBK prices $800mln in landmark Additional Tier 1 bond issuance
Intense investor demand enabled a 50bpd tightening from initial price guidance, with final pricing set at 6.375%
Final pricing reflects a spread of just 240.3 basis points over US Treasury yields
The orderbook peaked at US$2.2 billion, representing an oversubscription of around 2.75x the deal size
International investors accounted for 53% of total allocations, while 47% originated from within the MENA region
Asset managers and investment funds represented 48% of allocations, followed by banks and private banking at 44%, while other investors comprised the remaining 8%
National Bank of Kuwait (NBK) successfully priced a US$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 US$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% of total allocations, followed by investors from the UK (19%), the United States (18%), Europe (13%), and Asia (3%).
By investor type, asset managers and investment funds represented the largest share at 48%, followed by banks and private banking clients at 44%, while sovereign entities, insurance firms, and pension funds comprised the remaining 8% of total demand.
Robust investor demand enabled NBK to achieve highly favorable pricing for the issuance, with the final yield set at 6.375%—representing a 50 basis point tightening from the initial price thoughts (IPTs) of 6.875% (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, J.P. 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 US$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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