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Oversea-Chinese Banking Corp., Singapore’s third-biggest bank by market value, said it plans to sell US dollar-denominated fixed-rate subordinated bonds that will qualify as lower tier 2 capital.
The coupon on the 10-year notes will rise if they aren’t redeemed after five years, the bank said in a statement today. The sale will be benchmark in size, it said, which typically means at least US$500 million ($694 million).
Moody’s Investors Service said it assigned an Aa2 rating to the bonds, its third-highest investment grade. Credit Suisse Group AG, Goldman Sachs Group Inc. and Morgan Stanley are helping OCBC with the sale.
OCBC said on Oct. 28 that third-quarter rose 12%, beating analysts’ estimates, on gains in insurance, trading and investment income. The bank said on Oct. 15 that it agreed to buy ING Groep NV’s private banking assets in Asia for US$1.46 billion in cash.
The bonds may be priced to yield about 165 basis points more than mid-swaps, analysts at Royal Bank of Scotland Group Plc in Singapore said in a note to clients today. A basis point is 0.01 percentage point.
