UPDATE:OCBC Launches $1 Billion Bond at Treasurys +255 Basis Points

Date : 09/04/2012 @ 1:55PM
Source : Dow Jones News
Stock : Bank of America Corp. (BAC)
Quote : 25.02  -0.14 (-0.56%) @ 4:25PM
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UPDATE:OCBC Launches $1 Billion Bond at Treasurys +255 Basis Points

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(Updates first two paragraphs with launch terms.)

    By Natasha Brereton-Fukui and Patrick McGee 

SINGAPORE--Oversea-Chinese Banking Corp. (O39.SG) launched its $1 billion, 10 1/2-year U.S. dollar bond Tuesday.

The tier II note, which is subordinate to the bank's senior debt, can be called or redeemed by the bank at the 5 1/2-year mark, so it is priced against the five-year Treasury bond. It offers investors an extra 2.55 percentage points over the rate, according to a term sheet seen by Dow Jones Newswires on Tuesday.

Initial guidance had indicated a yield spread of around 2.7 percentage points.

The planned bond is being issued off OCBC's $10 billion global medium-term note program. If the bond isn't called at the 5 1/2-year mark, the yield will reset to the initial spread over prevailing five-year swaps.

The bonds are provisionally rated A-plus by Fitch Ratings and Aa2 by Moody's Investors Service.

The proceeds will be used for general corporate purposes.

Bank of America Merrill Lynch, J.P. Morgan Chase & Co. (JPM) and OCBC are bookrunners on the proposed offering. The marketing is being done in the Rule 144A/Reg S market, meaning the offering is closed to U.S. investors. Reg S offerings allow borrowers to sell U.S. dollar bonds without registering them with the Securities and Exchange Commission.

Write to Natasha Brereton-Fukui at natasha.brereton-fukui@dowjones.com and Patrick McGee at patrick.mcgee@dowjones.com

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