CIMB Bank launches Reg S only US$1 bln dual tranche notes

KUALA LUMPUR: CIMB Bank Bhd has launched and priced a Regulation S (commonly known as Reg S) only US$1 billion (US$1=RM4.45) dual tranche issuance under its US$5 billion Euro Medium-Term Note Programme.

A Regulation S is bond issued for international investors sold outside the United States.

The issuance consists of US$500 million three-year floating rate notes (FRN) and a US$500 million five-year fixed rate notes (FXD), it said in a statement yesterday.

This dual tranche issuance is the largest US dollar offering in the Reg S format by an Asean financial institution since 2010, and also the first ever dual tranche FRN/FXD issuance by a Malaysian financial institution.

The three-year FRN was priced at a spread of 80 basis points (bps) over the US$ three-month LIBOR while the five-year FXD were priced at a spread of 115 bps over the five-year US Treasury, equivalent to a yield of 3.263 per cent per annum.

The notes will mature on March 15, 2020 and March 15, 2022 respectively, said CIMB.

“Expected to be rated A3 (stable) by Moody’s Investors Services, the notes were successfully priced through an intraday book building process,” it said.

The offering was met with demand from a wide array of investors, allowing a tightening of 25bps from the initial price guidance across both tranches.

The total combined order book size across both tranches at final guidance was over US$1.7 billion, with the participation of 62 accounts for the FXD and 68 accounts for the FRN.

For the three-year notes, Asian investors accounted for 89 per cent of the allocation while the balance of 11 per cent were European investors while for the five-year notes, Asian investors took up 92 per cent and Europeans (eight per cent).