Southern Banks brings Malaysia's first hybrid debt deal

Bank bolsters capital with hybrid tier 1 deal.

Southern Bank Berhad, Malaysia's ninth largest bank by assets, completed an upsized $200 million hybrid tier 1 deal on Wednesday October 26 via UBS. Having initially marketed the deal based on an issue size of $150 million, the Ba2BB rated transaction was increased by $50 million after attracting an order book around the $600 million mark.

Based on a perpetual non-call 10 structure, the deal was priced at par on a coupon of 6.62% to yield 203bp over Treasuries, or 153bp over swaps. Pricing at this level also came through initial guidance between 155bp to 160bp over swaps.

The main pricing benchmark was the bank's...

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