SINGAPORE lender Oversea-Chinese Banking Corporation (OCBC) accessed the covered bond market for the second time this year, pricing on September 28 a 500-million-euro (US$588 million) offering.
The Reg S five-year bonds were priced at 99.970% with a coupon of 0.25% and a spread flat over mid-swap. They are backed by 100% Singapore dollar-denominated residential mortgage loans. The bonds are guaranteed as to payments of interest and principal by Red Sail Private Limited, with the guarantee secured by a portfolio of assets purchased by Red Sail from OCBC and other assets of Red Sail.
The bank launched its maiden covered bond in March this year with a similar amount of offering in the euro market. The bonds had the same coupon and a spread of 7bp over mid-swap.
The net proceeds from the issue will be used for general corporate purposes. The deal garnered an order book in excess of 1.7 billion euros from 70 accounts. The bulk of the paper was distributed in Germany at 51%, while another 14% was sold in the UK, 7% in Italy, 6% in Benelux, 5% each in Switzerland and Nordic countries, 8% in other European markets, and 4% in Asia-Pacific and the Middle East.
By type of investors, banks accounted for 34%, central banks and official institutions 32%, fund managers 23%, corporates 4%, and other investors 7%.
Barclays, BNP Paribas, Credit Agricole CIB, DZ Bank, J.P. Morgan and OCBC were the joint bookrunners in the transaction.
This was the second fund raising announced by OCBC this week, as it also priced earlier a A$300 million (US$235 million) senior floating rate notes deal. The three-year deal, announced on September 25, carries an interest of 0.60% over three-month bank bill swap reference rate per annum.
The notes, drawn from the bank’s US$10 billion global medium-term note programme, are issued through its Sydney branch and are expected to be repo eligible by the Reserve Bank of Australia. The net proceeds will be used for general corporate purposes.
ANZ, Commonwealth Bank of Australia, National Australia Bank, OCBC and Westpac Institutional Bank were the joint bookrunners and lead managers for the transaction.