Friday, April 8, 2011

Alliance Bank's RM600m debt notes get overwhelming response

KUALA LUMPUR: Alliance Bank Malaysia Bhd's first tranche of RM600 million subordinated medium term notes (MTN) has received overwhelming response from a diverse spectrum of investors.

ALLIANCE FINANCIAL GROUP BHD [] group chief executive officer Sng Seow Wah said on Friday, April 8 said there was strong response and bids from the investors.

'The order book was more than six times the issue size and the final pricing was well within the lower band of initial price guidance,' he said. The coupon rate has been fixed at 4.82% per annum, payable semi-annually for the entire tenure.

The subordinated notes issued will have tenure of 10 years and is callable five years after the issue date and on every coupon payment date thereafter, at the option of the issuer and subject to BNM's approval.

The proceeds from the issuance of the first tranche shall be used to redeem the existing RM600 million subordinated bonds of Alliance Bank callable on May 26, 2011.

Alliance Investment Bank Bhd was the principal adviser and lead arranger for the subordinated MTN programme, whilst OCBC Bank (Malaysia) Bhd, OSK Investment Bank Bhd together with Alliance Investment were the joint lead managers for the subordinated notes.

The subordinated notes issued were part of the RM1.5 billion subordinated MTN programme. They are also eligible for inclusion as tier-2 capital of Alliance Bank under Bank Negara Malaysia's (BNM) capital adequacy regulations.

The subordinated MTN programme is rated A2 with stable outlook by RAM Rating Services Bhd. The ratings agency also reaffirmed the long- and short-term financial institution rating of Alliance Bank of A1 and P1 respectively.

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