03 Apr 2016

news image


BBK and Securities & Investment Company (SICO) jointly announce the opening for subscription on Sunday 3 April 2016 of BBK’s BD 100 million (US$ 265.3mn) perpetual tier 1 convertible capital securities offering, which will close on Monday 18 April 2016. 
BBK, a leading retail bank in the Kingdom of Bahrain, is the Issuer and Receiving Bank; while SICO, a prominent Bahrain-based GCC wholesale bank, is the Lead Manager of this first-of-its-kind Bahrain Dinar-denominated perpetual convertible capital securities issuance. 
According to Chief Executive, Mr. Reyadh Yousif Sater: “The capital increase will be used for enhancing BBK’s capacity to grow its asset base primarily through core lending activities.It will also fund the Bank’s strategic expansion initiatives, both locally and globally. These include the recent approval to open a representative office in Turkey, and our plans to boost international trade finance activities.” 
The offering is open to all shareholders in BBK’s ordinary share registeron the offering record date of 27 March 2016 at a subscription price of BHD 1.000 per security.
Shareholders also have the right to over-subscribe and transfer their rights to other shareholders or investors of their choice. Copies of the offering prospectus and the subscription application form can be collected from designated branches of BBK, which are BBK’s Main branch, Adliya Financial Mall, Budaiya Financial Mall, Muharraq – Airport Road Financial Mall, Isa Town Financial Mall, Riffa Financial Mall, 9 Exhibition Road Financial Mall, Diplomatic Area Branch, Hamad Town Branch, in addition to the bank’s branch in Kuwait to facilitate the subscription for the bank’s shareholders residing there. These branches will also receive completed application forms and subscription funds from shareholders.
The capital securities offer an attractive annual interest rate of 8.25 per cent for the first five years, after which the rate will be reset to the equivalent of 3-month Bahraini Dinar Interbank Offered Rate (BHIBOR) plus 5.86 per cent. Interest will be payable on 2 May and 2 October each year, commencing on 2 October 2016. The capital securities, being perpetual, have no fixed or final redemption date; and may only be redeemed at the Issuer’s option after a minimum period of five years after issuance, unless they have been converted by the Issuer.
An option to convert the securities, in whole or in part, into ordinary shares of BBK has been reserved. This option could be exercised in any one of three years – 2019, 2020 or 2021 – subject to approval of BBK shareholders at an extraordinary general meeting. Following approval by the Bahrain Bourse (BHB), the securities will be admitted for trading on the BHB from 3 May 2016. This is in line with recent initiatives to bring new products and services to the 
stock market in order to increase its appeal and competitiveness, which are being steered by the Central Bank of Bahrain.
Ms. Najla M. Al Shirawi, Chief Executive of SICO, said: “We are delighted to be working with BBK to lead manage this first-of-its-kind BHD-denominated tier 1 perpetual convertible capital securities issuance in the region. This instrument will not only enable banks to meet central bank and Basel III requirements for Tier 1 capital in a cost-effective and flexible manner; but also help to improve liquidity and diversity of options on the Bahrain Bourse. Our involvement reinforces SICO’s track record as a leading provider of comprehensive andinnovative corporate finance services in the GCC since 1997.” 
The capital securities constitute a form of capital with specific features that comply with regulations applied to banks to meet their regulatory capital requirements; and which have been continuously strengthened by the Central Bank of Bahrain in line with the Basel Committee on Banking Supervision since the global financial crisis of 2008.

More News

This website uses cookies to ensure you get the best experience and by clicking “I Accept” below, you consent to the use of cookies. Learn more