OCBC's proposed subordinated notes rated 'A'

Standard & Poor's assigned its 'A' issue rating to OCBC's proposed US dollar-denominated subordinated notes issue due 2019.

These notes are callable in 2014 and will initially bear interest at a fixed rate. If they are not called, interest will be reset at a fixed rate based on the relevant US Treasury benchmark rate with a step up.

The proposed subordinated notes are intended to qualify as lower Tier-2 capital of OCBC Bank and will be direct, unsecured, and subordinated to the claims of senior creditors, including depositors. The proposed notes will rank senior to all share capital of OCBC Bank, Tier-1 capital securities, and upper Tier-2 capital securities. The notes will rank pari passu with all subordinated debt issued by OCBC Bank that the Monetary Authority of Singapore, the local regulator, approves as qualifying for lower Tier-2 capital treatment.

The difference between the rating on the proposed notes and the 'A+' counterparty credit rating on Oversea-Chinese Banking Corp. reflects the subordinated nature of the notes. The notes have no interest deferral feature. The proceeds of the notes will be used for general corporate purposes.