USD Issue : OCBC Basel III Tier 2 Sub Notes
ISSUER: Oversea-Chinese Banking Corporation Limited (“OCBC”)
ISSUER RATINGS (M/S/F): Aa1 / AA-/ AA-
EXPECTED ISSUE RATINGS (M/S/F): [A2] / [BBB+] / [A+]
SECURITY DESCRIPTION: Basel III compliant Tier 2 Subordinated Notes
FORMAT: 144A/Reg S drawdown from Issuer’s GMTN Program
SIZE: USD Benchmark
TENOR: 10.5NC5.5 PRICE GUIDANCE: CT5+265bps area
RANKING: Direct, unsecured and subordinated obligations qualifying as Tier II Capital Securities
OPTIONAL ISSUER CALL: One-time issuer call in year 5.5, subject to MAS approval
INTEREST: Fixed for the first 5.5 years, thereafter reset at then prevailing 5-year USD mid swap rate plus the Initial Credit Spread
TRIGGER EVENT: Earlier of (i) the MAS notifying the Issuer in writing that a write-off is necessary, without which the Issuer would become non-viable; and (ii) a decision by MAS to make a public sector injection of capital, or equivalent support, without which the Issuer would have become non-viable, as determined by MAS
EARLY REDEMPTION EVENTS: Change of Qualification Event or for taxation reasons, subject to MAS approval
TERMS: SGX-ST Listing, $200k / $1k denoms, English Law (except subordination provisions governed by Singapore Law)
USE OF PROCEEDS: General corporate purposes
EXPECTED TIMING: Today’s Business
Comparable:UOB 2024-call 2019 trades around 3.91% YTC
Comment : Will need to raise more capital at Tier 1 and equity level. 1. Share placement and 2. perpetual securities probably in SGD.
That translates to about 4.3% pa at par? Am I right in my calculations? When does it start trading?
books closed today already.
it was marketed at 4.32% coupon whisper but books were over 3 billion as at singapore market close, so it’s likely they will print at a significantly lower coupon.
for example UOB marketed at 4.1x% but eventually printed at about 3.8% yield (3.75% coupon priced at 99.xx)
UOB is now underwater but let’s see how this OCBC will do.
i placed an order at yield limit of 4.25%. I will likely get priced out.
as expected, i got none as it launched at 4% @ 99.xx.