Singapore's Oversea-Chinese Banking plans convertible tier II notes

By Jennifer Chiou

New York, Feb. 21 - Oversea-Chinese Banking Corp. Ltd. announced plans to issue convertible tier II notes and to offer the notes for subscription to its shareholders.

The notes will be convertible into Oversea-Chinese Banking ordinary shares and will carry a to-be-determined coupon.

Directors of the company are proposing to pay a final tax-exempt dividend of S$0.14 per share for the year ended Dec. 31. The company said it plans to allow shareholders to use the dividend amount to subscribe for the notes.

Assuming that all shareholders elect to use their dividend to subscribe for the notes, up to S$432 million of notes will be issued. Shareholders will only be able to use their dividend to pay for the notes.

The Singapore-based retail and commercial lender said that it may increase the total issue amount to up to S$500 million.

Oversea-Chinese Banking said that the offering will help to replace part of its surplus tier I capital.

The company added that the dividend is subject to shareholder approval, noting that the offer is expected to meet completion before June 30.

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