You are here

OCBC establishes US$10b global covered bond programme

16-21353680 - 04_09_2011.jpg
OVERSEA-CHINESE Banking Corporation (OCBC) has established a US$10 billion global covered bond programme that will be available to certain non-US investors outside of the US.

OVERSEA-CHINESE Banking Corporation (OCBC) has established a US$10 billion global covered bond programme that will be available to certain non-US investors outside of the US.

This programme, announced in a filing to the Singapore Exchange on Wednesday night, makes OCBC the third and last bank Singaporean bank to do so.

The bonds will allow investors to have recourse to both OCBC and a portfolio of assets through the covered bond guarantor, Red Sail Pte Ltd, said OCBC in the release.

"The covered bonds may be issued to certain non-US investors outside of the US," it said.

sentifi.com

Market voices on:

They can also be issued to "qualified institutional buyers" as defined by US authorities.

Net proceeds from the issue of each tranche will be used by OCBC for general corporate purposes.

OCBC has appointed the Singapore branch of Barclays Bank plc, and the Singapore branch of Crédit Agricole Corporate and Investment Bank, together with OCBC, to act as the joint arrangers and initial dealers of the programme.

Covered bonds are most comparable to mortgage-backed securities (MBS). Banks can package assets such as mortgages into securities that yield a cash payment, which are then sold to investors. The yield would reflect the credit quality of the underlying assets. The difference is that unlike MBS, covered bonds' assets remain on the bank's balance sheet.

Shares of OCBC closed three Singapore cents higher at S$8.77 on Wednesday before the announcement.

grab

Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.

Find out more at btsub.sg/promo

Powered by GET.comGetCom