OCC 5.1% NCPS# has been redeemed

As predicted during my talks and in this blog, OCC  5.1% NCPS# (GG0.SI) will be redeemed on 29 Aug 2018.

http://infopub.sgx.com/FileOpen/OCC2008_Notice_of_Redemption_10Aug2018.ashx?App=Announcement&FileID=520870

Why was I so confident?

Its quite straight forward really, if you know where to look. Here is a business times article from 2014.

https://www.businesstimes.com.sg/companies-markets/more-spore-issued-basel-iii-bonds-in-the-offing-moodys).

There is a clear trend that all banks have been redeeming their old style preference shares and perpetual bonds; and replacing them with Basel III compliant perpetual securities that have the additional benefit (to the banks) of absorbing losses. This means that these Basel III compliant bonds carries higher risks.

Last week 24 Aug, OCBC issued their new 4% perpetual securities. It has the Basel III loss absorption clause. Despite the higher risk, this bond was 3.5 times over subscribed. Its now trading at about 101.


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