Gulf Bank issues KD 100mn Tier 2 compliant bond

KAMCO and Markaz act as Joint Lead Managers

KUWAIT CITY, May 31 2016: Gulf Bank K.S.C.P. (“Gulf Bank”) announces the successful issuance of a 10 years non-callable before 5 years, Tier 2 Basel III – compliant subordinated bond for KD 100 million.

KAMCO Investment Company K.S.C. (Public) (“KAMCO”) and Kuwait Financial Centre K.P.S.C. (“Markaz”) acted as Joint Lead Managers for the issuance and Meysan Partners acted as legal advisors on the transaction.

In a joint press release, Gulf Bank highlighted the success of the issuance of the subordinated Tier 2 Basel III – compliant bonds with a rating of BBB by Capital Intelligence. This is the first public issuance for Gulf Bank and will provide the Bank with a prudent balance between the different components of its capital, in order to continue enhancing earnings and shareholder returns. The transaction was oversubscribed and well received by institutional and high net worth investors. This is the third KWD denominated Tier 2, Basel III compliant debt issuance in Kuwait.

Cesar González-Bueno, Chief Executive Officer of Gulf Bank said, “Gulf Bank is pleased with the outcome of this Tier 2 Basel III bond issuance. This is the first public issuance of its kind for Gulf Bank and we are delighted that it was so well received by investors. This will play a crucial role in strengthening the Bank’s Capital Adequacy Ratio and will help the Bank implement its strategic corporate direction. Local debt markets have become increasingly more sophisticated and this has been an important step in further supporting Kuwait’s bond market. Gulf Bank would like to thank the Central Bank of Kuwait and the Capital Markets Authority for their ongoing support and cooperation. We also appreciate the role KAMCO, Markaz, and Meysan Partners have played in this issuance.”

Faisal Sarkhou, Chief Executive Officer of KAMCO said, “We are proud to have played an active role in successfully completing Gulf Bank’s Tier 2 compliant bond issuance. We consider this bond issuance to be yet another building block in supporting the Kuwait capital markets. We progressively work towards developing and enhancing the private sector and Kuwaiti economy through diverse investment opportunities. We value our Investment Banking and Wealth Management teams in consistently undertaking roles in key announced transactions, while putting forth their experience and credibility to deliver the best possible outcome for our clients during each transaction process.”

Manaf A. Alhajeri, Chief Executive Officer of Markaz said, “We cannot emphasize enough the importance of developing a bond market that could contribute to the stability of investment portfolios and fixed income funds. Therefore, we at Markaz

Faisal Sarkhou, CEO of KAMCO Cesar Gonzalez-Bueno, CEO of Gulf

Bank have been spearheading efforts to deepen the local debt market through structuring and managing new bond issuances, in addition to publishing research and periodical reports about bonds activities in the region. The capital markets and fixed income team at Markaz enjoys more than 10 years of experience and has managed the issuance of 14 bonds with a total value exceeding KD 440 million. We are proud to be partners with Gulf Bank in this issuance which was met with high demand reflecting investors’ trust in Gulf Bank and the soundness of the bond structure.” The Bonds are comprised of two tranches; Fixed and Floating. The Fixed Rate Tranche coupons are fixed for the first five years from date of issue at 6.50% per annum payable quarterly in arrears, and fixed for subsequent periods at CBK Discount Rate (on the date of the fifth anniversary from date of issue) plus 4.25% per annum, payable quarterly in arrears. The Floating Rate Tranche coupon rate is equal to CBK Discount Rate, determined every three month, plus 4.00% payable quarterly in arrears.