OCBC to boost tier-2 capital through bond swap

The Singapore bank is offering to exchange all S$1 billion worth of outstanding subordinated bonds due 2011 for slightly senior 10-year non-call-five notes.

Oversea-Chinese Banking Corporation OCBC has announced a bond swap, offering to exchange its S$1 billion $645 million of outstanding 5% upper tier-2 bonds due September 2011 for the same principal amount of new 5.6% lower tier-2 notes due 2019. While the exchange won't result in any fresh cash, it will increase the bank's lower tier-2 capital, which ought to be viewed favourably by investors in an environment where there is an increasing focus on capital adequacy ratios.

The new subordinated...

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