Taiwan's Cathay United lifts tender cap for Dutch auction to $175 million for 5.5% notes

By Susanna Moon

Chicago, April 28 - Cathay United Bank Co., Ltd. said it will now accept up to $175 million of its $500 million 5.5% subordinated notes due 2020 in the modified Dutch auction tender offer.

The tender cap was increased from $125 million.

As of April 27, the early tender date, investors had tendered $168.62 million principal amount of the notes.

The offer will expire at midnight ET on May 12. It began on April 14.

As previously noted, holders who tender must specify a tender price of $820 to $920 per $1,000 principal amount of notes. The tender price includes an early tender premium of $30 for each note tendered by the early tender time.

The bank will also pay accrued interest up to but excluding the payment date, which is expected to be May 18.

Under the modified Dutch auction procedure, Cathay United will accept notes tendered in the order of the lowest to the highest tender prices, in increments of $5, and will select the single lowest price per $1,000 principal amount of notes that will allow it to purchase a principal amount of notes equal to the tender cap.

If the amount of notes tendered at or below the clearing price exceeds the tender cap, Cathy United will first accept all notes tendered at prices below the clearing price and then the notes tendered at the clearing price on a prorated basis.

JPMorgan is the dealer manager for the offer, and Bank of New York Mellon is the information and tender agent.

Cathay United Bank, based in Taipei, is the commercial banking unit of Cathay Financial Holding Co., Ltd.

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