DBS prices A$750m subordinated notes due 2028 at 3-month Bank Bill Swap plus 1.58%

DBS Group Holdings has priced its first Tier 2 capital offering denominated in Australian dollars, offering A$750 million (S$771 million) of subordinated notes due 2028 at a floating coupon of 158 basis points over the three-month Bank Bill Swap reference rate.

The notes, which fall under the bank's US$30 billion global medium-term note programme, may be redeemed in whole, but not in part, at the option of DBS on March 16, 2023, or any interest payment date thereafter, subject to approval from the Monetary Authority of Singapore.

The notes are expected to be issued on March 16, DBS said.

Net proceeds from the issue will be used for the finance and treasury activities of DBS, including the provision of intercompany loans, or other forms of financing to DBS Bank and its subsidiaries.

The bonds are expected to be rated A3(hyb) by Moody's and A+ by Fitch Ratings.

An application will be made to the Singapore Exchange Securities Trading for the listing of these notes on the Singapore bourse, but there is no guarantee that this will be approved, DBS said.

Added DBS chief financial officer, Chng Sok Hui: "This is the first time DBS has accessed the Australian market for a regulatory capital offering, responding to AUD (Australian dollar) investors and favourable market conditions. This issuance further diversifies our investor base, and testifies to the strong support from investors within and outside of Australia."

DBS Bank, National Australia Bank, Commonwealth Bank of Australia and Westpac Banking Corporation are joint lead managers for this issue.