OCBC raises $500 million

MANILA, Philippines - Oversea-Chinese Banking Corp. (OCBC) took advantage of stronger credit markets, pricing a $500-million lower tier-2 subordinated bond issue. It was the first time since December 2007 that an Asian bank has included a call option after five years, and succeeded, despite investor anger earlier this year when Deutsche Bank and Korea’s Woori Bank failed to exercise their early redemption options.

The issue pays a coupon of 4.25 percent, and was reoffered at 99.889 to yield 4.275 percent, which was165 basis points over mid-swaps or 199.7bp over the five-year US Treasury yield.

The coupon on the notes will step up by 100bp — to 299.7bp over the five-year Treasury — if they are not called on Nov. 18, 2014. The final maturity date would then be Nov. 18, 2014.