DBS (D05.SG) issuing five-year USD-denominated bonds deemed necessary as its loan-to-deposit ratio on USD book “is very high” at 139%, with loans exceeding deposits by $10.3 billion, says JPMorgan, which has Overweight call with $18.00 target, according to Dow Jones.

JPMorgan notes DBS’ fixed-rate USD lending has increased by equivalent of $2 billion on-year at end-2Q10: “though (the) USD/SGD swap market is very deep and DBS is a big player, we believe this step is to reduce currency/duration mismatch.”

Research house says impact of interest cost on bottomline close to 1%, depending on issue size. Bond will be issued out of DBS’ US$10 billion ($13.5 billion) debt programme, expected to launch as early as Tuesday.

Shares hardly swayed by news, off 0.4% at $14.18 in thin trade, mirroring mild broad market retreat. Orderbook quotes suggest price likely to hold above $14.00.