Moody's Investors Service has assigned a Prime-1 short-term rating to the US$2 billion Euro Commercial Paper (ECP) and Certificate of Deposit (ECD) programme of the National Bank of Kuwait (NBK), in line with the Prime-1 rating already assigned to the bank's other short-term liabilities. The outlook on the Prime-1 rating is stable.
According to Moody's, the Prime-1 rating reflects NBK's exceptionally strong creditworthiness, underscored by its superior asset quality, healthy capital levels, high recurring earning power and comfortable liquidity, as well as its dominant position as the premier financial institution in its domestic market. Moody's expects NBK to maintain its considerable strength in terms of market position and financial flexibility, with a significant amount of highly liquid, short-term assets that allows ample ability to discharge short-term liabilities on a timely basis.
Moody's also notes that, although NBK has not established any committed back-up lines or swinglines dedicated to this issue, the bank's superior liquidity position and excellent creditworthiness allow easy access to domestic and international money markets and mitigate the liquidity risk associated with the issue. Further, the bank has established guidelines limiting the maximum amount of short-term liabilities maturing on a short-term basis to a modest amount relative to the bank's significant short-term assets. Moody's notes further that NBK's significant international presence across many international financial centres and time zones, as well as its ability to raise funds in a variety of markets somewhat mitigates the risk arising from the lack of swinglines to cover short-term event risk. Moreover, NBK's past performance of controlling event risk and discharging all obligations during periods of extreme crisis, as well as a very high degree of expected government support should such support become necessary, add additional comfort.
Headquartered in Kuwait, NBK is the largest bank in the country, with total assets of US$18.5 billion at 31 March 2005. In addition to the bank's 47 branches within Kuwait, NBK has an extensive international network, including branches or subsidiaries in New York, London, Geneva, Paris, Singapore, Bahrain, Jordan, Qatar, Vietnam, Saudi Arabia, Iraq and Lebanon.
