AMTD Transactions | BEA US$600m Tier 2 Capital Offering

Recently, The Bank of East Asia, Limited (“BEA” or the “Bank”) successfully priced its US$600m 10NC5 Tier 2 capital offering (the “Transaction”). AMTD acted as Joint Lead Manager on the Transaction.

The Transaction is BEA’s first USD Tier 2 capital offering since 2016 and the first Tier 2 capital offering from Greater China in 2020YTD. The Transaction is the also first ever Tier 2 capital offering by a Hong Kong bank that qualifies as LAC capital instrument under the HKMA LAC Rules. The issuance is completed ahead of BEA’s existing USD600m Tier 2 which is maturing in July 2020.

Given it is the first Tier 2 issuance in the Greater China area in 2020 and the LAC capital instrument issued by a Hong Kong bank, BEA conducted a one-day roadshow ahead of bookbuilding to explain the structure and for price discovery.

Initial price guidance was set at T5+425bps area to attract investor attention. Orderbook momentum was strong right from the start with orders totalling US$1bn within one hour and US$2bn by lunch time. The book was over US$5bn at its peak in the afternoon comprising of high quality investors including sovereign wealth funds and large global real money institutions. Final price guidance was tighten to T5+375bps given the strength of the orderbook and most investors stayed in the book due to the scarcity of Tier 2 issues so far this year and the high credit spread on offer compared to historical issues. This Transaction represents the first transaction led by AMTD for BEA, BEA also acted a Joint Dealer Manager and Joint Global Coordinator on AMTD International’s recent exchange offer and perpetual bond issue, reflecting AMTD’s increasing cooperation with BEA and building a closer long term mutually-beneficial partnership.