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SINGAPORE: OCBC Bank will offer 10 million non-convertible, non-cumulative guaranteed preference shares at S$100 per share to raise S$1 billion.
The offer will be made through its OCBC Capital Corporation subsidiary and may be increased to up to 15 million shares of S$1.5 billion if demand exceeds the initial 10 million shares.
The latest offer comes on the heels of the bank's June offer of S$1 billion worth of preference shares, which it said was targeted mainly at retail individual investors and received overwhelming response.
OCBC said earlier that the latest offer of shares is also mainly targeted at non-institutional investors and that customers had told the bank they are still on the look-out for such investment opportunities.
Like the June offer, the latest preference shares offered carry a fixed dividend rate of 5.1 per cent per annum, payable semi-annually in March and September each year up to 2018.
The shares are perpetual securities with no fixed redemption date, but can be redeemed by OCBC in September 2018 and on each dividend date thereafter, subject to approval by the Monetary Authority of Singapore.
If the shares are not redeemed by September 20, 2018, the dividend will become a floating rate dividend tied to the prevailing three-month Singapore Dollar Swap Offer Rate plus 2.5 per cent per annum, payable every three months. The dividends are guaranteed by OCBC.
The offering will be made by way of a placement and an ATM offer, which will open from 9am on August 12 and close on August 26. Of the total 10 million shares, 2.5 million will be offered under the ATM offer, which is open to the general investing public and more accessible for retail investors. They may also apply for the placement shares.
ATM applications will be subject to balloting if the total subscriptions exceed the amount available.
Under the ATM offer, the minimum subscription is 100 shares of S$10,000, and thereafter in multiples of 100.
The shares are intended to qualify as Tier 1 capital and OCBC intends to use the issue to further strengthen its capital base and balance its different types of capital so as to achieve greater capital efficiency.
The shares have been rated Aa3 by Moody's, A+ from Fitch and A- from Standard and Poor's. They are expected to be listed on the Singapore Exchange mainboard from August 28 and traded in board lots of 100.
- CNA/so
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