S&P assigns OCBC notes BBB+

S&P said it assigned its BBB+ long-term issue rating to the offering of $1 billion of tier-2 subordinated notes by Oversea-Chinese Banking Corp. Ltd.

The agency rates the securities two notches below OCBC’s stand-alone credit profile of a. The rating reflects subordination and a non-viability clause requiring the bank to write off the securities if a loss-absorption event occurs, S&P said.

OCBC would have to write off the securities if the Monetary Authority of Singapore tells the bank it would be nonviable without writing them off, or if the authority decides to make a public-sector injection without which the bank would nonviable.

The securities are intended to qualify as tier-2 capital for regulatory capital purposes. They will rank junior to all depositors and senior creditors, and senior to all additional tier-1 bondholders.

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