Commercial Bank of Kuwait (Al-Tijari) and the Kuwait Financial Centre (Markaz) have announced the completion of the $326.7 million (KWD 100 million) subordinated tier 2 capital bonds program after issuing the KWD 50 million second tranche bond with a tenure period of 10 years.
The issuance was executed through a private placement to qualified investors, where the bonds were fully subscribed, reflecting the investors’ trust in the quality of the issuance. The deal marks the completion of the first bond program for the Commercial Bank of Kuwait.
“The bonds have received significant traction from investors, given the excellent position the bank enjoys in the Kuwaiti banking sector,” said Elham Mahfouz, the CEO of Commercial Bank of Kuwait.
“The timely success of this deal is attributed to the clear operational framework of the bank, supported by the professional expertise of the lead manager and subscription agent, and the positive and impactful interaction with the regulatory authorities.”
The bonds of the second tranche of the program offer rewarding returns for holders, as they were issued at a floating interest rate of 3.0% above the discount rate set by the Central Bank of Kuwait, with the minimum annual interest rate standing at 5.0%, per annum, payable semi-annually.
Al-Tijari will use the proceeds from the bond issuance to increase tier 2 capital, enhancing its capital adequacy ratio in compliance with the Basel III framework. The proceeds will also support the bank’s future expansion plans.
“The issuance witnessed strong demand from investors, driven by the stable performance and growth strategy pursued by the Commercial Bank of Kuwait and its strong credit rating, in addition to our professional capabilities as the lead manager,” said Ali H. Khalil, the CEO of Markaz.
Moreover, the unsecured subordinated tier 2 compliant bond issuance was rated BBB by Capital Intelligence, reflecting the bank’s solid capital base.
