Commercial Bank of Kuwait – Initial Rating Assigned to Second Tranche of Tier 2 Subordinated Unsecured Bond (KWD50mn); First Tranche Rating Affirmed

1 July 2024

Rating Action

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has assigned an issue rating of ‘BBB’ to the KWD50mn Basel III-compliant Tier 2 subordinated unsecured bond to be issued by Commercial Bank of Kuwait (ComBk) under its KWD100mn Subordinated Tier 2 Bond Programme.  This is the second tranche to be issued by the Bank.

At the same time, CI Ratings has affirmed the ‘BBB’ rating of the first KWD50mn Programme tranche, which was issued in September 2023.

Rating Drivers

The issue ratings are derived from: (i) ComBK’s Bank Standalone Rating (BSR); (ii) the bonds’ contractual subordination to senior unsecured obligations; and (iii) CI’s view that the bonds’ loss absorption mechanism is unlikely to be triggered before the Bank becomes non-viable on a standalone basis. CI’s issue ratings for bank hybrid securities and subordinated debt instruments (especially those with contingent capital features) capture…