Kuwait's Boubyan Bank completed a $250 million capital-boosting sukuk issue on Tuesday, according to a document from the lead managers, becoming the latest Gulf lender to bolster its reserves.

More than a dozen Gulf banks have announced capital raising plans to meet local regulatory requirements, which in some cases are above levels set by the Basel III banking accord, and to top up reserves after years of lending growth.

Boubyan's sukuk, structured with a perpetual tenor and with an option for the bank to redeem the paper after the fifth year, priced at 6.75 per cent, according to the document.

The deal, which will enhance the bank's Tier 1, or core, capital, received orders from local and international investors worth $1.3 billion, chief executive Adel Abdul Wahab Al Majed was quoted as saying in a statement from the bank.

He was later quoted on Arabiya TV as saying the issue would boost the bank's capital adequacy to 20 per cent from 11 per cent now. The capital adequacy ratio, a key indicator of a bank's health, is a combination of Tier 1 and Tier 2 capital.

Majed said the issue would cover the bank's capital needs for the next two years, with consideration to be given during 2018 on whether to sell a new sukuk or undertake another form of capital increase.

The sharia-compliant lender, a subsidiary of National Bank of Kuwait, picked Dubai Islamic Bank, Emirates NBD Capital, HSBC, KFH Capital, National Bank of Kuwait, Standard Chartered and itself to arrange the issue.

Abu Dhabi Islamic Bank, Ajman Bank and Noor Bank joined the transaction at the end as co-managers, the document from lead managers said.-Reuters