DBS Bank prices S$1.7bln preference shares

The securities to pay a non-cumulative fixed dividend rate of 4.70% per annum.

DBS Bank announced that it has successfully priced on Thursday an offering of S$1.7 billion of non-cumulative, non-convertible, non-voting, preference shares callable in 2020 ("Preference Shares"). The DBS Group has outstanding Tier I instruments which are callable in 2011. The net proceeds from the issue of the Preference Shares, estimated to be approximately S$1.7 billion, are intended to allow the DBS Group to exercise these calls, which are subject to regulatory approval. The offering is expected to close on or around 22 October, 2010.

The Preference Shares will, subject to customary dividend deferral provisions, pay a non-cumulative fixed dividend rate of 4.70% per annum for the life of the Preference Shares. The Preference Shares are perpetual but may be redeemed at the option of DBS Bank on any date on or after 22 October 2020. The Preference Shares have been assigned indicative ratings of "A3" by Moody's Investors Service, Inc., "A" by Standard & Poor's Ratings Group and "A" by Fitch Ratings Ltd, according to a DBS report.

Chng Sok Hui, Chief Financial Officer of DBS Bank, said: "We are pleased with the strong demand for our Tier-1 offering, as this underscores institutional investors’ confidence in our prospects as DBS executes on our strategy and builds on our strong fundamentals. Following this successful issue, we are considering a separate retail offering of preference shares to cater to retail demand.”

The securities were distributed to institutional investors: 79% to private banks, 10% to insurance companies, 6% to fund managers and the remainder to corporates and other banks.

The offering's sole lead manager and bookrunner is DBS Bank. Deutsche Bank, Goldman Sachs (Singapore) Pte. and The Royal Bank of Scotland are co-managers for the offering.

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