Mubasher: Moody's Investors Service has assigned a provisional senior unsecured foreign-currency rating of Aa3 to the $3 billion global medium-term note (GMTN) programme of NBK SPC Limited, a special-purpose vehicle established by National Bank of Kuwait (NBK).

According to a report issued on Friday, the (P) Aa3 foreign-currency rating assigned to the senior unsecured class of notes of the new GMTN programme is aligned with NBK's Aa3 long-term deposit rating.

It also reflects that the instruments issued under the programme will be direct, unconditional, unsubordinated and unsecured obligations of NBK.

NBK's ratings are driven by its a3 baseline credit assessment (BCA) as well as the very high government support assumption, its dominant position in its domestic market, underpinning its resilient core profitability and growth prospects, its robust financial fundamentals including consistently strong asset quality, and the concentrations on both sides of the bank's balance sheet and limited geographic diversification.

Moody’s expects that bottom-line profitability will remain constrained by relatively elevated provisioning charges and still tight margins, although these should start to widen in 2017 as benchmark interest rates rise.