Bank SinoPac (建華銀行), a unit of the nation's 10th-biggest lender, plans to sell US dollar-denominated bonds in the third overseas debt sale by a local bank this year, an e-mail sent to investors by the sale's arranger showed.
The unit of SinoPac Financial Holdings Co (建華金控), which in June agreed to buy International Bank of Taipei (台北商銀) for NT$48 billion (US$1.4 billion), plans to sell "benchmark"-sized subordinated bonds. Bank SinoPac can redeem the perpetual bonds, which have no maturity date, in the 10th year, the e-mail said.
The Taipei-based lender hired UBS AG to manage the sale, the e-mail said.
Bank SinoPac will promote the sale to investors in Hong Kong, Singapore and London from tomorrow through Friday.
The subordinated debt will count as upper tier 2 capital, or secondary bank capital which has no fixed maturity. The bonds are set to be rated Baa3 by Moody's Investors Service and BBB- by Fitch Ratings, the lowest investment grade, the e-mail said.
Bond investors pay a lower price for subordinated debt than regular bonds as recompense for being paid later than other claimants in case of a bankruptcy.
SinoPac Financial will become the nation's fourth-largest publicly owned bank after merging with International Bank of Taipei.
SinoPac raised US$230 million selling bonds convertible into its shares in 2002.
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