Dewey Ballantine has advised joint bookrunners and lead managers JP Morgan and Morgan Stanley on the National Bank of Kuwait's (NBK) first-ever bond issue. The $450m (£316.29m) floating rate Eurobond is the first issuance on the international debt market out of Kuwait. NBK instructed long-term adviser Clifford Chance. Lead partner Susan Mitcham said that the deal was particularly significant because NBK was rated higher than the Kuwait sovereign. Moody's gave NBK an A2 rating while the sovereign ceiling is BAA1. Mitcham said: "The NBK risk was perceived to be better than the sovereign risk because the bank is seen as being very strong and has a lot of assets outside of Kuwait." NBK's prominence in Kuwait means that the deal has set an aggressive pricing benchmark that subsequent transactions will have to follow. Dewey Ballantine lead partner Camille Abousl-eiman said that future Middle Eastern debt issues are likely to follow the whole NBK deal structure. This is particularly important given that so far the Gulf is largely untapped. Abousleiman said: "A number of issues arose from reconciling Kuwaiti law on bonds with the requirements of international capital markets. Kuwaiti law provides for the appointment of a bondholders' representative, but the UK provides for a trustee." In the end, the deal was structured so that the bondholder representative and trustee were the same person. "This was the principle hurdle that had to be overcome," said Dewey Ballantine partner Alain Checri. The structure used is reasonably novel, but there have been a number of similar transactions in Lebanon. Dewey Ballantine has advised on the majority of these deals. The firm also advised Merrill Lynch and Morgan Stanley on the first bond issue for the Republic of Egypt. In this transaction, White & Case advised the issuer. Merrill Lynch was the first investment bank to enter the Middle East, but Credit Suisse First Boston, Goldman Sachs, Morgan Stanley and JP Morgan are all playing catch up and the work is now evenly spread. Checri said that Dewey Ballantine is being instructed on other capital markets transactions in Kuwait.