Oversea-Chinese Banking Corporation (OCBC) has launched a benchmark international offering of US dollar denominated fixed rate subordinated notes to institutional and sophisticated investors, reported The Asian Banker. The notes are expected to have a 10-year maturity and a call option 5 years from the issue date, with a step-up in the fixed rate coupon after the 5th year if the notes are not called by OCBC.
The Notes are expected to qualify as lower Tier 2 regulatory capital of OCBC. The proposed issue is part of OCBC Bank’s ongoing capital management plan to improve the mix of its Tier 1 and Tier 2 capital instruments, so as to enhance the efficiency of its capital structure. As of 30 September 2009, OCBC Group’s Tier 2 capital was fully offset by deductions from capital and its eligible total capital comprised entirely of eligible Tier 1 capital. Both the group’s Tier 1 and total capital adequacy ratios were 15.2% as of 30 September 2009.
The net proceeds from the issue of the notes will be used for general corporate purposes of OCBC Bank. The proposed issue is unrelated to the funding of the proposed acquisition of ING Asia Private Bank and its affiliated entities, announced on 15 October 2009.
OCBC Bank, Credit Suisse (Singapore), Goldman Sachs (Singapore) and Morgan Stanley Asia (Singapore) are joint lead managers and joint bookrunners for the proposed issue.
