Two of Asia's largest commercial banks returned to the international debt markets late last week with a dollar-denominated deal for Bank of East Asia and a Euro deal for Korean lender Woori Bank.
Citigroup and Goldman Sachs priced a new Reg-S only $500 million 10-year non-call five-year deal for Bank of East Asia on Friday (December 1). The deal marks the return to the senior bond markets for Hong Kong's largest independent bank since it similarly raised a $550 million from a 10-year non-call 5-year issue in 2001. That deal priced to yield at 7.622% or 187.5bp over Libor.
The new BBB/Baa1 rated deal was priced at 99.725% on a semi annual coupon of 5.625%, to yield a spread of 124.5bp over US Treasuries or 72bp over mid-swaps. The notes step-up to 122bp over three-month Libor if not called in year five.
Proceeds will be used to refinance the call option on the previous deal.
The deal built a solid order book closing roughly two-times oversubscribed with participation by 60 accounts. By geography, the majority of the notes were placed into Asia with 88%, while 12% went to Europe.
On Thursday night (November 30) joint bookrunners Deutsche Bank, JPMorgan and Merrill Lynch priced an Eu300 million Reg S five-year FRN for Woori Bank.
Initially marketed to investors at the 37bp to 40bp level over Euribor, the leads were able to tighten guidance to 34bp-37bp level as the book built up momentum. The notes were priced at par on a coupon of 35bp over Euribor. Fees were 20bp.
Oversubscribed to a tune of $650 million, the deal was sold equally to Asian and European investors.
The deal marks Woori's first tap of the overseas debt market since its senior unsecured $500 million five-year fixed rate deal in September. That deal priced inside of revised price guidance at 37bp over Libor, and was trading around the 34bp level when the new deal priced.
Woori benefited from the upsurge in investor appetite for Korean bank FRN's in the wake of deals from IBK, KDB, Kexim, and Kookmin bank.
