CIMB prices US$1b, dual-tranche Reg S only notes

KUALA LUMPUR: CIMB Bank Bhd has launched and priced a Reg S only US$1 billion (RM4.46 billion) dual tranche issuance under its US$5 billion euro medium-term note programme.
The issuance consisted of US$500 million three-year floating rate notes (FRN) and US$500 million five-year fixed rate notes (FXD).
This dual tranche issuance is the largest US dollar offering in the Reg S format by an Asean financial institution since 2010, and the first ever dual-tranche FRN/FXD issuance by a Malaysian financial institution.
The three-year FRN were priced at a spread of 80bps over the US dollar three-month Libor. The five-year FXD were priced at a spread of 115bps over the five-year US Treasury, equivalent to a yield of 3.263% per year. The notes will mature on March 15, 2020 and March 15, 2022 respectively.
Moody’s Investors Services has assigned an A3 rating (Stable) for 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 US$1.7 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 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 US$350 million benchmark issuance in 2012,” CIMB Group group head of treasury & markets Chu Kok Wei said in a statement.
The notes will be listed on Bursa Malaysia Securities Bhd (Exempt Regime) and Singapore Exchange Securities Trading Ltd. CIMB Investment Bank Bhd, Citigroup Global Markets Ltd, JPMorgan Securities Plc and Standard Chartered Bank were the joint bookrunners for the notes issuance.