Trowers & Hamlins has acted as international legal counsel for BBK B.S.C. (BBK), a leading financial services firm and one of the largest banking institutions in the Kingdom of Bahrain offering a broad range of advice, products and services, on its issue of BHD 100,000,000 perpetual subordinated contingent convertible additional tier 1 capital securities (callable 2 May 2021 and every five years thereafter) arranged by Securities & Investment Company (SICO).
The proceeds of the issuance shall be used by BBK for its general corporate purposes, supporting the bank in its three-year strategic plan and to help the bank meet the regulatory capital base required by the Central Bank of Bahrain (CBB) in line with Basel III capital adequacy requirements. The issue is the first of its kind in that there is a conversion to equity only option and no contractual write-down feature upon the occurrence of a non-viability event. BBK as the issuer has the option to convert the capital securities to equity on 2 May 2019 (year 3); 2 May 2020 (year 4); or 2 May 2021 (year 5). It is the first such AT1 instrument in the Kingdom of Bahrain to be approved by the CBB. The Offer is scheduled to open on 3 April 2016 and closing is scheduled for 18 April 2016. The capital securities will be listed on the Bahrain Bourse.
Salman Ahmed, Partner in the Trowers & Hamlins International Finance practice, commented "This is a significant regulatory capital transaction in the Kingdom of Bahrain to be issued in accordance with the Basel III guidelines as implemented by the CBB. We are very pleased to assist BBK and SICO on this landmark transaction. The success of this transaction in difficult market conditions demonstrates the robustness of Bahrain as a key jurisdiction for financial institutions and enhances the reputation of the CBB as a leader in innovation. This transaction establishes a successful template for recapitalisation under the Offering of Securities Module in the Kingdom of Bahrain. We are very hopeful that this will encourage other entities to follow suit."
This instruction means that Trowers & Hamlins has now been appointed as the principal legal advisor on every major domestic (non-government) bond issuance since the CBB issued new rules on the offering of securities in Kingdom of Bahrain (the Offering of Securities Module) on 1 January 2014. It cements our position as the pre-eminent legal advisor for capital markets transactions in the Kingdom of Bahrain.
The Trowers & Hamlins team of lawyers was led by partner Salman Ahmed and lead senior associate Niall McMorrow, with support from partner Elias Moubarak and associates Barbara Anderson, Brian Kelleher, Adam Abdalla and Iman Allawati.
