Burgan Bank Redeemed KD100 Million, Subordinated Tier 2 Bonds Issued in 2016
Press release
Kamco Investment Company K.S.C.P. (Kamco Invest) was mandated as the Fiscal and Principal Paying Agent for the bonds, and has advised on and managed the bonds’ redemption process.
Highlights
The prior written approval of the Central Bank of Kuwait for Burgan Bank to exercise the call option was issued on 28 October 2020.
Burgan Bank K.P.S.C. successfully redeemed 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 Bank may exercise a call option to redeem the bonds five years from the date of their issuance or on any interest payment date thereafter.
The fixed and floating-rate tranches of the redeemed bonds carried coupon rates of 6.00% and 3.95% plus CBK Discount Rate, respectively. The redemption came after a US$500 million Subordinated Tier 2 Capital Securities issuance in the international debt capital markets in December 2020. The new bonds were priced at a fixed-rate of 2.75% and have an eleven-year tenor with a call option for redemption after six years from the date of their issuance (11NC6) or on any interest payment date thereafter. The new bonds also have an A- rating by Fitch. The new bonds comply with the Basel III regulatory framework, as adopted by the Central Bank of Kuwait.
The prior written approval of the Central Bank of Kuwait for Burgan Bank to exercise the call option was issued on 28 October 2020.
Kamco Investment Company K.S.C.P. (Kamco Invest) was mandated as the Fiscal and Principal Paying Agent for the bonds, and has advised on and managed 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.
For the avoidance of doubt, this communication is not an offer to purchase or sell financial instruments.
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Background Information
Burgan Bank
Established in 1977, Burgan Bank is the youngest conventional Bank and second largest by assets in Kuwait, with a significant focus on the corporate and financial institutions sectors, as well as having a growing retail, and private bank customer base. Burgan Bank has majority owned subsidiaries in the MENAT region supported by one of the largest regional branch networks. which include Gulf Bank Algeria - AGB (Algeria), Bank of Baghdad - BOB (Iraq & Lebanon),Tunis International Bank – TIB (Tunisia), and fully owned Burgan Bank – Turkey, (collectively known as the “Burgan Bank Group”). Furthermore, Burgan Bank has a present in the UAE through its corporate office (“Burgan Financial Services Limited) which had helped the bank to participate in multiple financing opportunities in the UAE.
KAMCO Investment Company
As investment architects, we design and customize your portfolios to meet your goals. We measure success not by awards but by our Clients’ success.
KAMCO was established in 1998 as a subsidiary of United Gulf Bank (UGB) and became one of the leading investment firms in the region in terms of assets under management (AUM). KAMCO is also regulated by the Capital Markets Authority and listed on the Boursa Kuwait. In 2018, KAMCO acquired a majority stake of 69.528% in Global Investment House K.S.C.C (“Global”).
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