Investors Pile Into OCBC’s Biggest Dollar Bond in Six Years

(Bloomberg) -- Investors piled into the biggest dollar bond offering from Oversea-Chinese Banking Corp. in six years, in a sign of confidence in the lender’s capital strength amid the pandemic.

OCBC attracted more than $5.8 billion of orders for the $1 billion of subordinated tier 2 notes it sold. That 5.8 times subscription ratio exceeds an average of 3.6 for the last 10 dollar notes issued by banks in Asia excluding Japan, according to data compiled by Bloomberg.

It comes amid other positive signs from the market. The price on its existing dollar bonds due in 2024 has recently climbed near a record.

OCBC and its local rivals have built hefty buffers to weather the Covid-19 crisis. While profit fell in the second half as it set aside provisions for loan losses amid a record plunge in the economy, OCBC was recently among the financial firms praised by the Monetary Authority of Singapore for commitments to avoid redundancies.

Nomura Holdings Inc. sees demand for bonds issued by Singapore lenders such as OCBC remaining strong due to their robust balance sheets that provide “a solid buffer against weaker asset quality” caused by the pandemic, analyst Nicholas Yap wrote in a note on Wednesday.

OCBC has the highest common equity tier 1 ratio among the three major Singapore lenders, a measure of capital strength, according to data compiled by Bloomberg.

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