DBS Group prices its first Basel III compliant Tier 2 issue

DBS Group Holdings (DBSH) said on Thursday that it has successfully priced the issue of S$250 million fixed rate callable subordinated notes due 2028 under its US$30 billion Global Medium Term Note Programme.

Its first Basel III compliant Tier 2 issue - expected to be issued on Jan 20, 2016 - will initially bear a fixed coupon of 3.80 per cent per annum with interest payable semiannually. If the notes are not redeemed on Jan 20, 2023, the interest rate from that date will be reset at a fixed rate per annum of the then-prevailing five-year Swap Offer Rate and 1.10 per cent.

The net proceeds from the issue will be used for the finance and treasury activities of the banking group, including the provision of inter-company loans, or other forms of financing to its subsidiaries.

DBSH has mandated DBS Bank as sole bookrunner, and Bank of China Singapore Branch, Citigroup and Deutsche Bank as co-managers for the issuance of the notes, which are expected to be rated A2 by Moody's Investors Service and A+ by Fitch Ratings.