Moody’s rates National Bank of Kuwait securities Baa3

Moody's Investors Service said it assigned a Baa3 (hyb) rating to the upcoming issuance of perpetual non-cumulative additional tier 1 (AT1) capital securities by NBK Tier 1 Financing Ltd., a wholly owned funding subsidiary of National Bank of Kuwait SAK.

NBK Tier 1 is a special-purpose vehicle established for the sole purpose of (a) issuing the AT1 securities; and (b) using the proceeds to finance a subordinated loan to National Bank of Kuwait (deposits Aa3 stable, baseline credit assessment a3).

The securities constitute unconditional, subordinated and unsecured obligations of National Bank of Kuwait.

As such, Moody’s said the Baa3 (hyb) rating assigned to the AT1 securities is based on National Bank of Kuwait's creditworthiness, and is placed three notches below the bank's a3 adjusted baseline credit assessment. The three-notch downward adjustment is a result of the securities' deeply subordinated claim in liquidation together with the risk of non-cumulative coupon suspension, in line with Moody's additional notching guidelines.

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