Moody’s rates National Bank of Kuwait bonds Baa1

Moody’s Investors Service said it assigned a provisional Baa1(hyb) long-term local-currency rating to National Bank of Kuwait SAKP’s planned issuance of Kuwaiti dinar-denominated subordinated bonds with contractual point of non-viability loss absorption features.

The bank has local- and foreign-currency deposit ratings of Aa3 stable, underpinned by a baseline credit assessment of A3, Moody’s said.

The rating assigned to the bonds reflects the specific characteristics of the security being issued and its relative ranking in the liability structure of the bank, the agency said.

Moody’s said it expects that the terms and conditions of the subordinated bonds will allow them to qualify as tier 2 capital under the Central Bank of Kuwait’s Basel III implementation.

The rating on the bonds also reflects the bank’s dominant position in its domestic market, resilient core profitability and robust financial fundamentals, the agency said.

The ratings also consider some concentrations on both sides of the bank’s balance sheet and the limited geographic diversification for the bank’s rating level, Moody’s added.

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