In a statement on May 18, Alliance Bank said the issue was allocated to 22 investors, with 53% going to insurers, 27% government agencies, 9% funds, 8% private banking and 3% financial institutions.
The bonds have a 10 year maturity with a call from the fifth anniversary of the issue date. They were priced at 6.09% fixed rate, which was equivalent to 91 basis points over the 5-year swap rate on May 17. If held for 10 years, the bonds will carry a revised coupon rate of 7.59% a year from the fifth year on until final redemption, representing a 150-basis point step-up from the original coupon rate.
Alliance Merchant Bank Bhd and HSBC Bank Malaysia Bhd are the joint lead arrangers, joint lead managers and joint bookrunners.
"Through a two and a half day bookbuilding process which began on May 15, 2006, the deal built up an impressive order book with M$1.27 billion in bids from a wide group of investors," Alliance said in the release.
ôIt was a very healthy order book in terms of the mix of investors,ö says Jason Khoo, a spokesman at HSBC Malaysia. ôAnd we saw most of the book build by the end of the first day.ö
The banks says the proceeds will be utilised for general working capital, including to refinance its existing M$535 million subordinated bonds at the end of June 2006.