Green Asia

Asian banks tap US dollar bond markets for $4.75 billion


SYDNEY :At least two Asia Pacific banks, led by the Commonwealth Bank and DBS Group, have aggressively tapped U.S dollar bond markets to raise $4.75 billion in separate transactions, according to term sheet seen by Reuters.

CBA, which is Australia’s largest bank by market capitalisation, squared away $3.25 billion in three issuances with $1.75 billion in a five-year covered bond, $900 million in a two-year fixed rate note and $600 million in a two-year floating rate note, a term sheet showed.

CBA declined to comment on the transaction.

Singapore’s DBS Group tapped the dollar bond markets for the first time in nearly two years as it raised $1.5 billion.

The deals came amid a blitz of bonds launched on Tuesday in the US when there were 21 issuances worth $31 billion, according to IFR.

A post Labor-day rush of bond issuance in the U.S. by global investment-grade-rated companies added renewed pressure on long-end U.S. Treasuries, as some investors switched to buying top-rated corporate debt offering higher yields than those on government bonds.

DBS issued a two-year fixed rate bond that raised $750 million and a two-year floating rate note that raised the same amount, the term sheet said.

The coupon on the fixed rate note was set at 5.479 per cent while the floating rate note was priced at the Secured Overnight Financing Rate (SOFR) plus 61 basis points.

DBS did not comment on the deal but confirmed the transaction in a term sheet sent to Reuters.

Investors subscribed for more than $2.65 billion of the two- year fixed rate bond, the term sheet showed. The floating rate note attracted over $2 billion in orders from investors.

U.S. and Asia-based investors bought nearly 90 per cent of the fixed bond and accounted for 98 per cent of the floating note, the term sheet showed.

DBS has flagged that the proceeds from the bonds would be used for its finance and treasury activities.


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