09 March 2017

CIMB Bank successfully launched and priced Reg S only USD1 billion dual tranche notes issuance

Kuala Lumpur: On 8 March 2017, CIMB Bank Berhad (“CIMB Bank” or “CIMB”) successfully launched and priced a Reg S only USD1 billion dual tranche issuance under its USD5 billion Euro Medium Term Note Programme. The issuance consisted of USD500 million three-year floating rate notes ("FRN") and USD500 million five-year fixed rate notes ("FXD") (collectively, “the Notes”).  This dual tranche issuance is the largest USD 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 (Source: Bloomberg).

The three-year FRN were priced at a spread of 80 bps over the USD three-month LIBOR ("3M$L"). The five-year FXD were priced at a spread of 115 basis points over the five-year US Treasury ("UST5"), equivalent to a yield of 3.263% p.a. The Notes will mature on 15 March 2020 and 15 March 2022 respectively.

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

The offering was met with demand from a wide array of investors, allowing a tightening of 25bps from initial price guidance across both tranches. The total combined order book size across both tranches at final guidance was over USD1.7 billion, with participation of 62 accounts for the FXD and 68 accounts for the FRN.

For the three-year notes, Asian investors accounted for 89% of the allocation with the balance of 11% to European accounts. Banks took up 47%, fund managers 34%, insurance 14% and the remaining 5% was taken up by corporates and others. For the five-year notes, Asian investors accounted for 92% of the allocation with the balance of 8% to European accounts. Banks took up 49%, fund managers 32%, insurance 17% and the remaining 2% was subscribed by corporates and others.

"We are very pleased with the outcome of this landmark floating rate note and fixed rate note combo transaction which also marked CIMB's return to the debt capital markets since the last USD350 million benchmark issuance in 2012," said Chu Kok Wei, Group Head, Treasury & Markets, CIMB Group.

The Notes will be listed on Bursa Malaysia Securities Berhad (Exempt Regime) and Singapore Exchange Securities Trading Limited. CIMB Investment Bank Berhad, Citigroup Global Markets Limited, J.P. Morgan Securities Plc and Standard Chartered Bank were the Joint Bookrunners for the Notes issuance.