INVESTORS were eager to snap up OCBC Bank's new US$1 billion subordinated notes due 2030, with the offering almost six times subscribed.

The notes, to be issued at par on Sept 10, are expected to qualify as Tier 2 capital of the bank.

This is the lender's largest US dollar Tier 2 subordinated bond in six years, OCBC told The Business Times on Thursday.

The notes will bear a coupon of 1.832 per cent per annum until the call date of Sept 10, 2025.

If the notes are not redeemed, the interest rate from the call date to the maturity date on Sept 10, 2030 will be reset to a fixed rate per annum equal to the then-prevailing five-year US Treasury Rate plus 1.58 per cent.

Net proceeds from the issuance will be used for general corporate purposes, the lender said.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Investor interest swelled to around US$5.8 billion, with 63 per cent of the orders coming from Asia, according to deal statistics OCBC provided.

About two-thirds of the notes were allocated to asset managers, insurers took 21 per cent, private banks constituted 8 per cent, while banks were allocated the remaining 4 per cent of the issuance.

The notes are expected to be rated A2 by Moody's Investors Service, BBB+ by Standard & Poors and A by Fitch Ratings.

OCBC will issue the notes under its US$30 billion global medium term note programme.

OCBC Bank, Citigroup Global Markets Singapore, JPMorgan (SEA) and Merrill Lynch (Singapore) acted as joint lead managers and joint bookrunners for the deal.

As at 4.36pm on Thursday, shares in OCBC were trading at S$8.64, down S$0.04 or 0.5 per cent.