Warba Bank closes 80 million dinar perpetual sukuk at 5.50%

Summary

• Warba Bank settled an 80 million dinar perpetual sukuk issue at a 5.50% profit rate.
• The instrument counts as Additional Tier 1 capital and carries no maturity date.
• Pricing sets a fresh reference point for upcoming Kuwaiti bank capital issues.

The latest

Warba Bank has closed and settled an 80 million Kuwaiti dinar perpetual mudaraba sukuk carrying a 5.50% profit rate, according to a disclosure filed with Boursa Kuwait. The issue qualifies as Additional Tier 1 capital, the layer banks use to absorb losses while continuing to operate. The bank said settlement took place on 27 October 2026.

Details

• The instrument: According to the Boursa Kuwait disclosure, the issue is a perpetual mudaraba sukuk with no maturity date, structured so that it counts toward Additional Tier 1 capital. Perpetual instruments of this type are ranked below ordinary debt and are designed to remain outstanding indefinitely unless the issuer acts.
• The pricing: The profit rate was set at 5.50%, according to the disclosure. That figure is the key reference for the deal, since Additional Tier 1 instruments typically price above senior bank funding to compensate investors for their deeper subordination and the absence of a fixed repayment date.
• Early redemption: The sukuk carries an early redemption option, according to the disclosure, allowing the bank to call the instrument rather than leave it outstanding permanently. The bank did not publish the first call date or the conditions attached to exercising the option.
• The structure: The issuing vehicle is Warba Tier 1 Sukuk (4) Limited, with Warba Bank itself acting as obligor, according to the disclosure. The numbering indicates this is the fourth such vehicle used by the bank for Tier 1 issuance.
• Governing law: The sukuk is governed by English law, according to the disclosure. Gulf issuers commonly select English law for international capital instruments because it is familiar to the cross-border investor base that buys subordinated bank paper.
• The arrangers: KFH Capital Investment, Kuwait Financial Centre (Markaz) and Warba Bank jointly managed the issue, according to the disclosure. The bank did not name the investors who subscribed or break down the allocation between local and foreign buyers.
• The bank's framing: Warba Bank said it expects the issue to have a positive effect on its financial position and its regulatory ratios. Additional Tier 1 capital strengthens a bank's capital adequacy ratio, which in turn determines how much new financing it can extend.
• Timing and disclosure: Settlement was completed on 27 October 2026, with the disclosure to Boursa Kuwait reported the following day. The bank did not disclose the size of the order book or whether demand exceeded the 80 million dinar issued.

Background

Additional Tier 1 is the regulatory capital layer sitting above common equity and below senior debt. Gulf Islamic banks raise it through perpetual sukuk rather than conventional bonds, because the structure must remain Sharia-compliant while still meeting Basel capital rules.

Between the lines

The 5.50% rate is the most portable piece of information in the disclosure. Because Warba is a mid-sized Kuwaiti Islamic lender issuing into the same investor pool as its peers, the level effectively marks where the market is willing to fund Kuwaiti bank Additional Tier 1 paper today. The bank's own stated expectation of stronger regulatory ratios points to a funding-capacity motive rather than a defensive one.

What's next

Watch Warba Bank's next quarterly disclosure for the updated capital adequacy ratio reflecting the 80 million dinars, and any subsequent Tier 1 issues by Kuwaiti banks pricing against the 5.50% level.

Source: Al Jarida, Warba Bank disclosure to Boursa Kuwait