Tuesday, August 12, 2008

OCBC Non-Convertible Preference Share Issue

I just put in my bid for the OCBC NCPS which is paying 5.1% per annum till perpetuity (subject to redemption by OCBC from 2018 at par value). If you can get it at par value, it is not a bad investment option.

However, it might not be advisable to hold it to perpetuity since the redemption occurs in year 10 and after which you will be getting the SOR + 2.5%. I'm sure there will be good opportunities that pays better when the equities market turned around.

I got this details from my banker below:-
OCBC will be issuing a new Preference Share with details as follows:

Issuer OCBC Capital Corporation (2008)

Guarantor OCBC Bank

Total Issue size SGD 1 billion

Upsize Option If applications are received for more than 10,000,000 Preference Shares, the offering may be increased at any time on or prior to the Closing Date from 10,000,000 Preference Shares to up to 15,000,000 Preference Shares

Issue Price SGD 100 each share

Maturity Perpetual

Issue & Allotment 27 August 2008 (or such other date as OCBC Capital
Corp 2008 and OCBC Bank may decide)

Dividend (a) Fixed rate of 5.1% per annum for the period
from the issue date up to 20 September 2018,
payable semi-annually on 20 March and 20 September
of each year

(b) Floating rate per annum equal to the three-

month SGD Swap Offer Rate plus 2.5% for the
period after 20 September 2018, payable quarterly
on 20 March, 20 June, 20 September and 20 December
of each year

Optional Redemption On 20 September 2018 and each dividend date
thereafter, at the option of OCBC Capital
Corporation (2008)

Ranking Rank equally with any preference shares or other
similar obligations of OCBC Bank or OCBC Capital
Corporation (2008) that constitute Tier 1 capital
of OCBC Bank on an unconsolidated basis

Voting Rights Holders of the Preference Shares will not be
entitled to attend and vote at general meetings of
OCBC Capital Corporation (2008), except in certain
limited circumstances

Listing Listed and traded on the Main Board of the SGX-ST,
expected from 28 August 2008 onwards

Rating Aa3 by Moody’s, A+ by Fitch and A- by Standard &

Governing Law Cayman Islands law (Singapore law for the subordinated
guarantee and the subordinated note)

Minimum subscription amount is SGD 250,000/-

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