December 20, 2016 / 12:25 PM / 2 years ago

Kuwait's Warba Bank picks nine to arrange $250 mln capital sukuk - sources

DUBAI, Dec 20 (Reuters) - Kuwait’s Warba Bank has mandated nine banks to arrange an Islamic bond, or sukuk, of up to $250 million that will boost its capital reserves, banking sources aware of the matter told Reuters on Tuesday.

The lender is the latest in the Gulf Arab state to seek to raise its buffers, as the impact of lower oil prices on the region’s economies feeds through into the sector and regulators globally pressure lenders to review and bolster capital ratios.

The planned Islamic bond will boost the bank’s core Tier 1 capital levels, the lender has said in previous statements.

The group of banks appointed as joint lead arrangers includes Ajman Bank, Bank ABC, Emirates NBD and Standard Chartered, two banking sources said on condition of anonymity as the information is not public.

Other institutions arranging the planned bond are Abu Dhabi Islamic Bank, KAMCO Investment Company, Kuwait Finance House, Noor Bank and the investment banking arm of Warba itself, one of the bankers added.

The sukuk sale, which was agreed in July this year and approved by the central bank in November, is likely to take place early in the first quarter of 2017, the banker added.

Warba Bank, an Islamic lender established in 2010, did not immediately respond to a request for comment.

National Bank of Kuwait completed a $473.2 million rights issue in June and Ahli United Bank Kuwait, Boubyan Bank and Gulf Bank have all sold either capital-enhancing bonds or sukuk since May.

Editing by Susan Thomas

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