Chong Hing gets big bid for novel LT2

31 Oct 2010

Chong Hing Bank sold an Asian first at the end of last week, raising $225m from a lower tier two deal that featured a 'regulatory switch'. The Hong Kong lender sold a subordinated bond that turns into a senior issue — and pays a smaller coupon — if it loses all of its capital credit. Investors swamped the deal, leaving the order book more than six times covered.

Goldman Sachs, HSBC and UBS priced the 10 year bullet to yield 337.5bp over Treasuries. That was at the tight end of guidance set between 337.5bp and 350bp, and the leads had initially approached investors with guidance of “the 250bp area”.

The coupon will step down by 50bp if ...

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