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Bahrain Bourse Lists “BBK Capital Securities”
May 03, 2016
Bahrain Bourse (BHB) signed on Tuesday, 3rd May 2016 two agreements with BBK, the first is to list BBK’s perpetual tier 1 convertible capital securities and the second to assign Bahrain Bourse as a registrar for the bondholders of the securities. 

The total number of securities listed is 86,097,511 with a nominal value per capital security of BD 1.000. Trading in the securities (ISIN BH000F358881) is open to all investors by placing buy and sell orders through a BHB-licensed broker, while clearing and settlement will be undertaken by the Bahrain Bourse. 

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, and will be paid on semi-annual basis.

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.

Congratulating BBK on the listing, Chief Executive of Bahrain Bourse, Shaikh Khalifa bin Ebrahim Al Khalifa, said: “The listing of this first-of-its-kind first Bahraini Dinar-denominated perpetual tier 1 convertible capital securities issuance in the region underlines the ongoing initiatives by the Central Bank of Bahrain and the Bahrain Bourse to bring new products and services to the stock market. These are designed to strengthen the competitiveness of the Bourse, and enhance its appeal to local, regional and international investors, both institutional and individual.”

BBK Chief Executive, Mr. Reyadh Sater, said: “We would like to thank our shareholders for their trust and confidence in the bank which translated in 86.1% participation in the offering. We would also like to thank our partners in this landmark transaction – regulators Central of Bank of Bahrain and the Bahrain Bourse; lead manager Securities & Investment Company (SICO); legal advisors Trowers & Hamlins (international) and Elham Ali Hassan & Associates (Bahrain); auditors Ernst & Young; and paying agents Karvy Computershare – for their professional contribution to the successful issuance, subscription and listing of the Bank’s capital securities.

“The issuance of the AT1 perpetual capital securities is an innovative form of capital raising which shall enhance BBK’s capital adequacy to support further growth of its earning asset base primarily through core lending activities, as well as funding the bank’s strategic expansion and diversified initiatives, both locally and globally. 

Chief Executive Officer of Securities & Investment Company (SICO) (lead Manager), Ms. Najla M. Al Shirawi, commented: “The successful listing of BBK’s capital securities has important implications for the Kingdom’s banking sector and stock market, and also for investors. It will also build and enhance the depth and diversity of investment options on the Bahrain Bourse. For investors, it will provide liquidity and an exit route, since they will be able to clear increase or decrease their positions through the secondary market.”

Following the listing of this bond issue, the number of conventional bonds and sukuk issues listed on BHB reached 12 issues with an approximate total value of US$ 4.56 billion.

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