'The events of 11 September forced us to put our previous plans on hold as global spreads widened, but the market is coming back,' says George Nasra, NBK's general manager for overseas branches. 'We are ready to go now and are expecting the issue to be staged in the first quarter, probably in February.'

The full size of the proposed three-year floating note will be determined by market appetite, but NBK is hoping to raise about $450 million at about 20-25 basis points over Libor.

'Our issue will be aided by scarcity value, the strength of the credit [US credit rating agency Moody's Investors Servicehas given an indicative rating of A2 for the bonds, some two notches above Kuwait's sovereign ceiling] and the high liquidity in international bond markets at the moment,' says Nasra.

NBK has mandated JP Morgan Chase & Companyand Morgan Stanley as joint lead arrangers of the facility (MEED 24:8:01).

The NBK issue will not only set a benchmark for future debt issues out of Kuwait, but will also pave the way for financial institutions based elsewhere in the region. It is understood that a number of other major GCC banks are preparing their own bond debuts.

The only other bonds to have come out the GCC are a handful of sovereign bonds from Qatar and Oman and a project bond, issued in 1997 by Qatar's Ras Laffan Liquefied Natural Gas Company (RasGas).