KUWAIT: Burgan Bank K.P.S.C. – Kuwait’s second largest conventional bank by asset size – successfully placed US$500 million Subordinated Tier 2 Capital Securities in the international debt capital markets in December last year. The bonds have an eleven-year tenor and an option for redemption after six years from the date of their issuance (11NC6), and are rated A- by Fitch. The bonds comply with the Basel III regulatory framework, as adopted by the Central Bank of Kuwait.
Following the successful issuance, the Bank announced yesterday that it issued a notice of early full redemption of its KD 100 million Subordinated Tier 2 bonds due 9 March 2026 (bonds), in accordance with the terms and conditions of their issuance. The terms and conditions of the bonds’ issuance stipulate that Burgan may exercise a Call Option to redeem the bonds five years from the date of their issuance or on any interest payment date thereafter, subject to the satisfaction of Condition 4(d) (Call Option) of the terms and conditions attaching to the bonds as outlined in the bonds’ Prospectus dated 9 March 2016.
The prior written approval of the Central Bank of Kuwait for Burgan to exercise its Call Option was issued on 28 October 2020.
Burgan is electing to exercise its Call Option to redeem the bonds (in whole at their principal amount, together with interest accrued thereon) on their fifth anniversary of 9 March 2021 (redemption date).
Kamco Investment Company K.S.C.P. (Kamco Invest) was mandated as the Fiscal and Principal Paying Agent for the bonds, and will be advising on and managing the bonds’ redemption process.
Burgan is rated A+ by Fitch, A3 by Moody’s and BBB+ by S&P, and is a regular issuer in the international debt capital markets. All of the Bank’s previous bond issuances have been successfully settled in accordance with the terms and conditions of their offering.
