OCBC prices S$500m in 3.9% perpetual capital securities, first callable in 2027
Tan Nai Lun
OCBC has priced S$500 million in 3.9 per cent perpetual capital securities, which will be first callable in 2027.
Net proceeds from the issue, under its US$30 billion global medium-term note programme, will be used for the general corporate purposes of the bank, it said in a bourse filing on Thursday (Jun 2).
OCBC expects the capital securities will qualify as Additional Tier 1 capital for the bank, under the requirements of the Monetary Authority of Singapore.
It also expects the capital securities will be rated Baa1 by Moody’s Investors Service, BBB- by Standard & Poor’s Rating Services and BBB+ by Fitch Ratings.
Holders will have a right to receive distributions semi-annually at a fixed rate of 3.9 per cent per annum, from the issue date to the first reset date on Jun 8, 2027.
If the capital securities are not redeemed on the first reset date, the distribution rate will reset every 5 years, to a fixed rate per annum equal to the combination of the then-prevailing 5-year Singapore Overnight Rate Average Overnight Indexed Swap (Sora OIS) and the initial spread of 1.416 per cent.
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The bank can redeem the capital securities either on the reset date or any distribution payment date thereafter, upon a tax event, or if the capital securities no longer qualify as eligible capital.
OCBC expects the capital securities will be issued on Jun 8, 2022.
Credit Suisse (Singapore), OCBC and Standard Chartered Bank (Singapore) are the joint lead managers and bookrunners for the issue.
Shares of OCBC closed up S$0.08 or 0.7 per cent at S$11.91 on Wednesday.
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