Bank of East Asia, the largest independent local bank in Hong Kong A3BBB, raised $600 million through a Reg-S lower tier-2 10-year non-call five FRN shortly after US bond yields rose to five-year highs. The deal, managed by sole bookrunner JPMorgan, marks the biggest bank capital issued by a Hong Kong bank.
The transaction, which includes a coupon step of 152bp over Libor, attracted a $900 million order book and priced at 52bp over Libor. The geographic split saw 87% of the bonds allocated to Asia, and 13% to Europe, with funds buying 3%, banks 86%, asset managers 8%, insurance and pension funds 2% and retail and private banks 1%.
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