Kuwait-Mubasher: Moody’s Investors Service assigned a provisional (P)Baa1(hyb) long-term local-currency rating to National Bank of Kuwait (NBK) which planned issuance of Kuwaiti dinar-denominated subordinated bonds with contractual point of non-viability (PONV) loss absorption features, according to a report issued by Moody’s.

The (P)Baa1(hyb) rating assigned to NBK's Tier 2 PONV instrument reflected specific characteristics of the security being issued as well as its relative ranking in the liability structure of the bank, according to Moody’s report.

Moody's said that NBK's standalone credit profile underpinned the BCA assigned to NBK, and constituted the anchor point for positioning the debt on Moody's global rating scale.

The rating agency expected that terms and conditions of the subordinated bonds would allow them to qualify as Tier 2 capital under the Central Bank of Kuwait's Basel III implementation.

“This is the first time Moody's has assigned a rating to a Basel III-compliant subordinated debt instrument issued by a bank in Kuwait and the Gulf Cooperation Council (GCC) in general,” stated the report.