DUBAI: Doha Bank has received shareholder backing to issue capital-boosting bonds worth up to 2 billion riyals ($549.3 million) as well as assent for issuance of regular bonds, Qatar's fifth-largest lender by assets said on Thursday.
The capital-enhancing bonds, which would boost the bank's Tier 1 -- or core -- capital, will have a perpetual tenor and an option for the bank to redeem them after six years, according to a bourse filing from the bank.
The sale of the bonds, which will happen through private placements with Qatari institutional investors, will take place no later than June 30, it added.
Doha Bank is one of a clutch of Gulf lenders to consider raising funds through capital instruments to sustain strong growth, diversify sources of funding and prepare for the new Basel III banking rules.
Dubai Islamic Bank sold $1 billion of Tier 1 Islamic bonds in January at 6.75 percent, while Qatar Islamic Bank and Oman's Bank Dhofar are among the names to have announced plans to issue Tier 1 bonds since the start of this year.
The shareholder meeting also approved the issuance of international bonds worth up to $2 billion in a variety of global currencies.
No single offering would exceed $750 million and maturities would be a maximum of 10 years for senior debt and 30 years for private placements.
In January, the lender reported a 7.2 percent decline in fourth-quarter net profit to 219 million riyals.
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