Kuwait's Global Investment House, downgraded by two ratings agencies for allegedly not meeting debt obligations, said it named HSBC as an adviser with foreign lenders after a meeting with them on Sunday.

Shares in Kuwait's biggest investment bank closed down 8.2 per cent on Sunday.  Last week, Global named Commercial Bank of Kuwait as an adviser for its borrowing needs after it said it was in talks with local banks to secure loans worth $1 billion.

Global said in a statement on Sunday it had added HSBC as an international adviser to help renegotiate its loans with foreign banks and reschedule debt, while CBK is still its local financial adviser.

"The debt restructuring process was formally commenced today (Sunday) following a well-attended meeting in Kuwait with the company's bank lenders. The banks have agreed to form a steering committee to continue discussions with the company and its advisers," Global said in the statement.

"The management of Global is committed to resolving the process as quickly as possible and is confident that this will be achieved to the benefit of all stakeholders."

The investment bank said earlier this month it was in talks with local banks to secure loans worth $1 billion to replace short- and medium-term foreign loans with local loans. It also sold its stake in a Bahraini lender at a loss to secure financing.

Global shares tumbled last week after Fitch Ratings downgraded the firm's long-term Issuer Default Rating to 'C' from 'BBB', citing its "inability to meet an obligation due on December 15 due to cash flow problems."

Standard & Poor's Ratings Services lowered its long- and short-term counterparty credit ratings on Global to 'SD/SD' from 'BBB/A-3', following Global's "nonpayment of a $200 million syndicated loan due on December 15," the agency said.

On Sunday, Kuwaiti daily al-Rai cited banking sources as saying the company was close to getting a $1 billion syndicated loan from local banks.

Last month, Kuwait said it would set up a bail out fund for investment firms to help them cope with the global financial crisis after the Gulf Arab state was forced to step in and rescue Gulf Bank  in October.

The central bank has said it expected some investment firms to run into trouble due to their exposure to global markets since many investments are financed through loans.

Global Investment House is licensed as an investment firm but offers investment  bank services such as underwriting issues or managing funds. It buys into firms and then sells them to investment funds.-Reuters