Sep 17, 2014

    ICBC issues largest Lion City bonds

    THE Industrial and Commercial Bank of China (ICBC) yesterday said its Singapore branch has issued a total of four billion yuan (S$821.4 million) of "Lion City" hybrid bonds, with two of the three tranches being dual-listed on the Singapore Exchange (SGX) and the GreTai Securities Market (GTSM).

    This is the biggest Lion City bond issuance to date, breezing past the previous two billion yuan (S$412 million) record ICBC set last year. It is also the first time a Chinese bank has issued dual-listed tranches.

    The four billion yuan hybrid bond issue was priced in three tranches; one for two-year bonds to raise two billion yuan, a second for five-year bonds to raise 700 million yuan, and the final for seven-year bonds to raise 1.3 billion yuan.

    The bonds were priced with a coupon of 3.5 per cent, 3.7 per cent, and 3.95 per cent respectively.

    Hybrid bonds usually have a mix of both debt and equity elements.

    The tranche of two-year bonds will be listed only on the SGX, while bonds from the remaining two tranches will be dual-listed on the SGX and the GTSM.

    ICBC Singapore said the issuance received strong support from across Asia and Europe. Orders for the hybrid Lion City bonds exceeded 7.3 billion yuan across the three tranches.

    The transaction was thus priced 10 to 15 basis points tighter from the initial price guidance.

    Bookrunners for this transaction were ICBC Singapore, BNP, Citi, DBS, HSBC, Standard Bank and Standard Chartered Bank.

    SinoPac Securities, together with the bookrunners, were joint lead managers, with Commerzbank and Commonwealth Bank of Australia being the co-manager for the transaction.