Strong demand from private banks has driven Credit Suisse Group’s successful debut in the Singapore dollar bond market.
The group priced S$ 750 million (US$543.5 million) worth of additional tier 1 (AT1) perpetual non-call five-year (NC5) contingent write-down capital notes, a transaction that diversifies Credit Suisse’s AT1 issuance currency and fixed income investor base.
The transaction, executed over two days, enabled Credit Suisse to maximise participation and achieve the tightest pricing.
The issue was priced at 5.625% and attracted total orders of more than S$2.7 billion. Credit Suisse reports strong interest from both institutional and private banking accounts. The order book saw private banks allocated 84%, fund managers 10%, banks 4% and insurers 2%.
Geographically, 91% of demand came .from Singapore clients, with the rest of Asia accounting for 7% and Europe the remaining 2%.
NC5 means the issuer has the right to call or redeem the bonds in year five. Additional Tier 1 capital (AT1) is structured with no fixed maturity and has a loss-absorption feature, which can be triggered when a crisis occurs. The notes will be rated BB- by Standard & Poor’s and BB by Fitch.
Credit Suisse CEO for Asia-Pacific Helman Sitohang says the transaction underscores the group’s commitment to the Asia-Pacific region, establishes a new source of funding for the bank and diversifies its investor base.
He adds: “It also demonstrates our world-class execution capabilities and the unique value proposition of our integrated model, which is based on close collaboration between our regional and global investment banking teams and our private bank in delivering capital raising and hedging solutions. The strong distribution platform that comes from Credit Suisse Private Banking is a key differentiator for us.”
Credit Suisse was the sole global coordinator and sole structuring agent for the transaction. It also acted as a joint bookrunner for the offering, along with DBS, Oversea-Chinese Banking Corporation, Standard Chartered and United Overseas Bank. HSBC was a joint lead manager, while Danske Bank, Deutsche Bank, NatWest Markets, Nordea and Rabobank were co-managers.
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