IFR-Kuwait's Burgan Bank said to hire banks for potential bond deal

Mon Apr 14, 2014 1:57am EDT

LONDON, April 14 (IFR) - Kuwait's Burgan Bank is said to have hired HSBC, KAMCO and NBK Capital for a potential bond deal, according to bankers.

It is not clear at this stage if the planned deal will be in U.S. dollars or Kuwaiti dinars, nor whether it will be senior or subordinated, though the latter seems more likely.

Burgan Bank, rated A3/BBB+, is one of two Kuwaiti lenders that has been planning to issue subordinated debt, the other being Gulf Bank.

Kuwait, along with several other Gulf nations, is in consultations ahead of a move to Basel III.

Burgan Bank wants to raise more capital this year to comply with the Basel III requirements, while any acquisitions are unlikely to come soon, the lender's chief executive said last month, Reuters reported at the time.

The increase, which may happen in the third or fourth quarter of this year, could be "pure capital" or perpetual bonds or both, CEO Eduardo Eguren said, depending on discussions with regulators and shareholders.

"We are discussing this with the central bank - I know that we may need to increase capital by 20 percent to 30 percent for sure," he told reporters on the sidelines of the AGM.

The bank has a total capital ratio of 15.4 percent and a Tier 1 capital ratio of 9.9 percent. (Reporting by Abhinav Ramnarayan)

FILED UNDER: