Julius Baer's SGD perpetual bond issue drawing strong interest; initial price guidance at 6.375%

SWISS bank Julius Baer's maiden issue of a Singapore dollar (SGD)-denominated, Basel III-compliant perpetual Additional Tier 1 (AT1) bonds is receiving strong interest.

Launched on Wednesday, the initial price guidance for the offering is 6.375 per cent, and indication of interest has reached in excess of S$500 million shortly after the sale began in the morning, a source said.

The Swiss bank last month said that it intends to sell SGD perpetual tier 1 subordinated bonds in a benchmark-sized volume - at a minimum of S$250 million-S$300 million - making it the first foreign bank to issue such a bond in the Singapore market.

The new bonds will likely be the highest-yielding AT1s in the SGD bond universe, since the existing AT1s are issued by the three local banks which are larger and have superior credit ratings, wrote iFAST in a note on the Julius Baer offering on Monday.