OCBC sells its first Basel III-compliant bond

OCBC Bank yesterday issued its first Basel III-compliant bond - US$1 billion of 10-year fixed rate subordinated notes - under its US$10 billion global medium term note programme. The capital-boosting exercise comes amid its acquisition of Hong Kong's Wing Hang Bank for $6.23 billion announced on April 1; it is also the last of the three local banks to issue Basel III-compliant capital.

Darren Tan, OCBC chief financial officer, said that the issuance was expected to qualify as Tier 2 capital under the Monetary Authority of Singapore's Basel III framework, and will improve its total capital adequacy ratio (CAR) as at Dec 31, 2013, by about 0.8 percentage point.

"It augments our capital position and places us well to capture growth opportunities, which include the possible pre-conditional voluntary general offer to acquire Wing Hang Bank," he said.