Success of first Basel III USD AT1 issue in Southeast Asia

Societe Generale Corporate & Investment Banking (SG CIB) acted as Joint Bookrunner on the inaugural USD 750 million Basel III Reg S Additional Tier 1 (AT1) perpetual capital securities transaction for DBS Group Holdings in August 2016.

DBS Group Holdings (rated Aa2/AA- by Moody’s/Fitch) is the largest banking group in Southeast Asia by assets, with S$451bn/US$336bn of total assets at 30 Jun 2016. The group is listed and headquartered in Singapore, the only Aaa/AAA rated sovereign in the region.

A new milestone in bank capital, the issue achieved the lowest coupon ever (3.60%) for a Basel III USD AT1 security by any bank globally. It is also the first ever Basel III USD AT1 issuance from a bank in Southeast Asia, and the only Investment Grade rated Basel III USD AT1 from Asia.

“This was the Group’s inaugural USD AT1 transaction, and it was important we worked with partners we could trust”, said Hong Nam Yeoh, Head of Wholesale Funding at DBS Group. “With the support of Societe Generale’s debt capital markets platform, we were able to engage with a broad range of investors in Asia and Europe, and were very pleased with the execution and final outcome”, he added.

This is another landmark public benchmark mandate from DBS where Societe Generale has been involved. It follows their inaugural USD 1 billion Covered Bond in July 2015 – Singapore’s first Covered Bond -  where Societe Generale acted as a Joint Global Coordinator.

“Investors had liquidity and were looking for yield, especially from high quality names. This transaction ticked the boxes – it was the only investment grade Basel III AT1 offered in US dollars in Asia, from a premier bank, and at an attractive yield,” said Raj Malhotra, Managing Director, Head of DCM for Southeast Asia, India and Australasia at Societe Generale. “We expect to see more AT1 bank issues from Asia, and welcome the opportunity to leverage our expertise and support further deals in the region.”

Through its role in this landmark transaction, and by drawing on its global and regional investor links, Societe Generale has once again exhibited its expertise and reinforced the strength of its debt capital markets franchise in Asia Pacific.