HSBC Holdings soared as it scored the largest bond sale in Singapore recently. The institution’s rate is A3/A-/A+, the bond sale was from a private sector issuer with a $900m. This is a 10-year non-call of five subordinated bonds qualifying as Tier 2 capital. Some agencies are also buying the same deals in 2022. But they are only public housing agencies and development boards. From this source of profit, the company was able to raise around $900m and $1bn in three visits.
Finally, the latest deal in HSBC is larger than the global bank’s last Singapore dollar in 2018 during $750m raising. Actually, this transaction is the largest in Singapore dollar Tier 2 issuance from a foreign bank in 10 years. This is especially from the headlines from ABN AMRO Bank around $1bn 4.7% of 10-year non-call five Tier 2 in 2012. This scenario drew a staggering book for $17bn.
The price of 5.25% was the new London-listed Reg S noted. The rating scored Baa/BBB/A- with the spread around 242.6bp over SORA. The initial guidance was around 5.5% area. The issuer was for the settled size in which the investors are willing to invest. The banker on the deal argues that the deal price should be in the U.S. dollar markets. Some bankers have estimated a cost around 20bp and 30bp for the bank. This comparison would be with a new issue in the U.S. dollars.
The banker adds that the U.S. Treasury yields wish to go higher. Many foreign issuers are looking for attractive funds and venues. The deal presents the begit to enter the Singapore dollar market. This is because the swap rates are their point of attraction. Thus, the final orders include $1.4bn from more than 80 accounts. It covers $285m from the lead banks.