Bank of East Asia bond adds to Basel III universe

Hong Kong bank completes its debut Basel III-compliant offering on the back of strong momentum in the bank capital sector.

Bank of East Asia completed its debut Basel III compliant Tier 2 bond on Thursday, raising $500 million from a deal that underlined how comfortable investors are becoming with the new asset class.

The BBB- rated issue was priced at 99.608% on a semi-annual coupon of 4.25% to yield 4.338% or 270bp over Treasuries. The deal has a 10-year non-call five structure, with the call option falling due on November 20 2019 and the coupon re-setting to 270bp over the prevailing five-year Treasury. 

The Reg S deal attracted an order book of $4 billion and 200 accounts even after pricing was tightened from an initial...

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