KUALA LUMPUR – CIMB Bank Bhd has launched and priced a Regulation S (commonly known as Reg S) only US$1bil dual tranche issuance under its US$5bil euro medium-term note programme.
A Regulation S is bond issued for international investors sold outside the United States.The issuance consists of US$500mil three-year floating rate notes (FRN) and a US$500mil five-year fixed rate notes (FXD), it said in a statement yesterday.
This dual tranche issuance is the largest US dollar offering in the Reg S format by an Asean financial institution since 2010, and also the first ever dual tranche FRN/FXD issuance by a Malaysian financial institution.
The three-year FRN was priced at a spread of 80 basis points (bps) over the US dollar three-month Libor while the five-year FXD were priced at a spread of 115 bps over the five-year US Treasury, equivalent to a yield of 3.263% per annum. The notes will mature on March 15, 2020 and March 15, 2022 respectively.
“Expected to be rated A3 (stable) by Moodys Investors Services, the notes were successfully priced through an intraday book building process,” it said. The offering was met with demand from a wide array of investors, allowing a tightening of 25bps from the initial price guidance across both tranches.
The total combined order book size across both tranches at final guidance was over US$1.7bil, with the participation of 62 accounts for the FXD and 68 accounts for the FRN. For the three-year notes, Asian investors accounted for 89% of the allocation while the balance of 11% were European investors while for the five-year notes, Asian investors took up 92% and Europeans (8%).
“We are very pleased with the outcome of this landmark floating rate note and fixed rate note combo transaction which also marked CIMB’s return to the debt capital markets,” said CIMB group head, treasury and markets Chu Kok Wei.