Citic Ka Wah to raise lower tier 2 debt

One of Hong Kong''s smallest banks by assets, Citic Ka Wah is hoping to finance its expansion plans with a $250 million subordinated debt deal.

The Baa2-rated bank is said to have mandated Barclays and UBS Warburg as joint-bookrunners for a 10-year deal, with ICBC as joint-lead. The three won a bidding war for aátransaction that many believeáwillátest the true strength and outer limits of demand foráGreater China credits.

It should, therefore, prove a tough but interesting challengeáfor the lead managers, althoughárivals have been quick to pointáout, all three have sizeable balance sheets to mop up excess paper.áThe main result of a competitive bidding process is said toáhave been extremely aggressive indicative pricing relative to comparables. In the face of bank capital experts who argue that 300bp would be an appropriate level, the deal is believed to have been won...

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