Singapore's Oversea-Chinese gets tenders for S$709.76 million 5% notes in exchange offer

By Angela McDaniels

Tacoma, Wash., March 25 - Oversea-Chinese Banking Corp. Ltd. has accepted S$709.76 million principal amount, or 73%, of its 5% bullet subordinated notes due 2011 in exchange for an equal principal amount of new 5.6% subordinated notes due 2019, according to a bank announcement.

An exchange offer for the notes began on March 5 and closed at midnight ET on March 23. The settlement date is expected to be March 27.

The 5% notes accepted for exchange will be cancelled, leaving S$265.24 million of notes outstanding.

Holders who elected to exchange all of their notes could apply for additional new notes in order to round up the total principal amount of new notes held to the nearest multiple of S$250,000. The bank said it accepted applications for S$2.17 million principal amount of the new notes, bringing the total principal amount of notes to be issued to S$711.93 million.

The new notes are non-callable for five years and rank senior to the existing notes.

The interest rate on the new notes will step up to 7.35% after five years. Unlike the existing notes, the new notes do not have an interest deferral option.

The bank said Standard & Poor's rates the new notes A and the old notes A-. Both the existing and new notes are rated Aa2 by Moody's Investors Service and A+ by Fitch Ratings.

The new notes are expected to be listed on the Singapore Exchange Securities Trading Ltd. on March 30, according to the announcement.

The purpose of the exchange offer was to substitute the existing notes with new notes that are expected to qualify for full regulatory capital treatment as tier II capital for the first six years.

The bank explained that under the capital adequacy guidelines applicable in 2001 when the existing notes were issued, the existing notes that can qualify as tier II capital for the bank and its subsidiaries have been subjected to progressive reductions of 20% per year from September 2006. When the offer began, only 40% of the existing notes remain qualified as tier II capital.

Oversea-Chinese Banking is a Singapore-based retail and commercial bank.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.