"Global shall have the option to convert the instrument into 330 million new shares of NBQ," they said in a joint statement.
The banks have yet to secure final regulatory approval for the transaction and no timeframe has been set for Global to convert the bonds.
Abu Dhabi-listed NBQ, which is 30 per cent owned by the government of Umm al-Quwain, the smallest of the seven emirates comprising the United Arab Emirates, said in February it was aiming to double its capital to 1.32 billion dirhams ($ 359.5 million).
"The new capital will assist the bank to develop its business operations and enhance its growth rate with a more solid capital basis," Sheikh Nasser bin Rashid al-Moalla, NBQ Managing director said. Once converted, NBQ’s paid-up capital would increase to 1.65 billion dirhams.
Officials at the Kuwaiti investment bank were not immediately available for comment.
"This investment is in continuation of our interest to widen and strengthen Global’s presence in the GCC banking and finance sector," Omar El-Quqa, Executive Vice President at Global said in the statement.
Banks in the world’s biggest oil-exporting region have benefitted from about a six-fold rise in oil prices since 2002 by expanding lending businesses as Gulf states plough record oil revenues into infrastructure, real estate and industry.
Many are exploring mergers and acquisitions as part of their expansion strategies. Emirates Bank International Ltd and National Bank of Dubai were combined by the Dubai government last year to create the Gulf region’s biggest bank by assets.
