Burgan Bank successfully issues Debut Senior bond with US$500 Million 5 year RegS Issuance

Burgan Bank K.P.S.C. successfully priced their inaugural US$500 million 3.125% coupon, 5 year senior issuance (the “bond”) under its newly established US$1.5 billion EMTN Programme and became the first financial institution to ever issue a public senior bond out of Kuwait.

The Bond, which priced at 99.30% had a re-offer yield of 3.278% and will mature on 14 September 2021. The EMTN Programme and the issuance will be listed on the Irish Stock Exchange.

Burgan Group Chief Investment Banking and Treasury Officer, Robert Frost said “We are very pleased that the Burgan bond was well received by both the regional and international fixed income investors. The significant support by the investor community for a first time issuer underlines Burgan’s strong credit standing in the markets. The bond further enhances the bank’s initiatives to diversify its funding sources."

A series of investor meetings was arranged globally across Singapore, Hong Kong, UAE and London, during which the Burgan team effectively communicated the credit story of the bank and generated substantial interest in the offering.

Despite a heavy supply of FI issuances from the MENA region coming to market post the summer period, Burgan was able to capitalize on the positive investor feedback and an opportunistic issuance window to swiftly execute their debut deal.

The company will be using the issuance proceeds for general corporate purposes. On the back of an orderbook in excess of US$1.5 billion with 129 orders, the bond ultimately priced at a spread of 215bps over 5 year Mid-swaps, a significant tightening from the initial price thoughts of "low to mid 200s".

The distribution profile of the book was well balanced, with Middle Eastern investors allocated for 49% of the transaction, while UK, Europe, Asian and US (offshore) investors accounted for 21%, 13%, 14% and 3% respectively, of the issuance.

In terms of investor type, the offering was distributed as follows: 49% for Banks, 41% for Fund Managers/Hedge Funds, 7% PBs, and 3% for others.

HSBC acted as the Global Coordinator with Emirates NBD Capital, HSBC, NBAD, SG CIB and Standard Chartered Bank as joint bookrunners on the offering.