我的聲明

我的聲明:

這blog原是用來紀錄我收集各樣債券的資料和知識,方便自己学習。非我原創性的文章,都会儘量標明出處或作者。Blog內紀錄的債券不代表我擁有或建議任何人投資。每個人都要為自已的投資決定負責任。

我主要投資直債或Reits。歡迎大家一同交流,互相鼓勵。如果你有好的債券分析,也歡迎email給我放上來,公諸同好!

我也有另外一個網誌"Reits World 我的房託世界"是關於投資REITS的,歡迎瀏覽。http://reitsworld.blogspot.hk

2016年3月24日星期四

* Bank of East Asia 5.5% 12/2/49 Pert AT1 Bond


Reference CodeXS1326527246
ISINXS1326527246
IssuerBank of East Asia Ltd
Guarantor-
Issue/ Reoffer Price100.000
Announcement Date25-Nov-2015
Issue Date02-Dec-2015
Maturity Date02-Dec-2049
Years to Maturity (Approximate)33.713
CurrencyUSD
Annual Coupon FrequencySemi Annually
Coupon TypeVariable
Annual Coupon Rate (% p.a.)5.500
Reference RateReset Rate= US Treasury + Spread (3.834%)
Reset Date = 02Dec2020 & every 5 yr thereafter
CUSIPQJ9359762
Bond TypeHigh Yield Corporate
Bond SectorFinancials
Bond Sub SectorBanks
Minimum Investment Quantity (Nominal)USD 150,000
Incremental Quantity (Nominal)USD 1,000
Bond Credit Rating (Moody's / S&P / Fitch)Ba2/ BB/ N.R
Issuer Credit Rating (Moody's / S&P / Fitch)A3/ A/ N.R
SenioritySubordinated
Exchange ListedHKEX
Modified Duration3.966
Issue SizeUSD 650,000,000
Callable:
The Issuer may, having given: (i) not less than 15 nor more than 45 days’ notice to the Securityholders in accordance with Condition 11; and (ii) not less than 15 days before the giving of the notice referred to in (i) above, notice to the Trustee and the Issuing and Paying Agent and the Registrar; (which notices shall be irrevocable and shall specify the date fixed for redemption), redeem all but not some only of the Capital Securities then outstanding on the First Call Date or any Distribution Payment Date thereafter, at the their outstanding principal amount together (if appropriate) with Distributions accrued to (but excluding) the date of redemption, subject to adjustment following the occurrence of a Non-Viability Event in accordance with Condition 4(C).

First Call Date = 2 December 2020

Conditions for Redemption:
Notwithstanding any other provision in these Conditions, the Issuer shall not redeem any of the Capital Securities (other than pursuant to Condition 9) and neither the Issuer nor any of its Subsidiaries shall purchase any of the Capital Securities unless the prior written consent of the Monetary Authority thereto shall have been obtained, to the extent such consent is required under the Banking Ordinance (Cap. 155) of Hong Kong, Banking (Capital) Rules (Cap. 155L) of Hong Kong, or any successor legislation or regulations made thereunder, or any statutory guidelines issued by the Monetary Authority in relation thereto.
Deferral of Interest Payment:
Non-Cumulative Distribution 
Distributions will not be cumulative and Distributions which are not paid in accordance with these Conditions will not accumulate or compound and Securityholders will have no right to receive such Distributions at any time, even if subsequent Distributions are paid in the future, or be entitled to any claim in respect thereof against the Issuer.

Optional Distribution Cancellation Event

Unless a Distribution has already been cancelled in full pursuant to a Mandatory Distribution Cancellation Event, prior to any Distribution Payment Date the Issuer may, at its sole discretion, elect to cancel any payment of a Distribution, in whole or in part,

Mandatory Distribution Cancellation Event

Notwithstanding that a Distribution Cancellation Notice may not have been given, the Issuer shall not be obliged to pay, and shall not pay, any Distribution on the applicable Distribution Payment Date, in whole or in part, as applicable, if and to the extent that:
  • the Distribution scheduled to be paid together with any dividends, distributions or other payments scheduled to be paid or made during the Issuer’s then current fiscal year on any Parity Obligations or any instruments which rank or are expressed to rank pari passu with any Parity Obligations shall exceed Distributable Reserves as at such Distribution Determination Date; or
  • the Monetary Authority directs the Issuer to cancel such Distribution (in whole or in part) or applicable Hong Kong banking regulations or other requirements of the Monetary Authority prevent the payment in full of dividends or other distributions when due on Parity Obligations

Dividend Stopper 

If, on any Distribution Payment Date, payment of Distribution scheduled to be paid is not made in full by reason of this Condition 4(B), the Issuer shall not:
  • declare or pay in cash any distribution or dividend or make any other payment in cash on, and will procure that no distribution or dividend in cash or other payment in cash is made on, any Shares; or
  • purchase, cancel or otherwise acquire any Shares or permit any of its Subsidiaries to do so,
Loss Absorption:
If a Non-Viability Event occurs and is continuing, the Issuer shall, upon the provision of a Non-Viability Event Notice, irrevocably (without the need for the consent of the Security holders of the Capital Securities) reduce the then principal amount of, and cancel any accrued but unpaid Distribution in respect of, each Capital Security (in each case in whole or in part) by an amount equal to the Non-Viability Event Write-off Amount per Capital Security (such reduction and cancellation, and the reduction and cancellation or conversion of any other Subordinated Capital Instruments so reduced and cancelled or converted upon the occurrence of a Non-Viability Event, where applicable, being referred to herein as the "Write-off", and "Written-off" shall be construed accordingly).

"Non-Viability Event" means the earlier of:
 1) the Monetary Authority notifying the Issuer in writing that the Monetary Authority is of the opinion that a Write-off or conversion is necessary, without which the Issuer would become non-viable; and 2)the Monetary Authority notifying the Issuer in writing that a decision has been made by the government body, a government officer or other relevant regulatory body with the authority to make such a decision, that a public sector injection of capital or equivalent support is necessary, without which the Issuer would become non-viable.

溫馨提示:CoCo bond是風險甚高的投資。雖然發行人都是大到不能倒的金融機構,但債券本身性質是轉移金融機構面對嚴峻危機衝擊時的風險。所以價格可以非常波動,甚至損失大部份或全部本金。雖然機率低,卻不表示沒有機會。所以要非常了解CoCo bond的機制和自己的承受能力才可以踫,不適宜重倉或高槓干操作。

Rating Action: 

Moody's assigns Ba2(hyb) to Bank of East Asia's point of non-viability perpetual AT1 capital securities

  The document has been translated in other languages

Global Credit Research - 12 Nov 2015

Hong Kong, November 12, 2015 -- Moody's Investors Service has assigned a Ba2(hyb) rating to Bank of East Asia, Limited's (A2 negative) proposed USD-denominated, perpetual, non-cumulative and subordinated Additional Tier 1 (AT1) capital securities.
The AT1 capital securities will be a drawdown from the bank's existing USD Medium Term Note (MTN) programme. The terms and conditions of the capital securities incorporate Basel III-compliant non-viability language in accordance with Hong Kong capital rules, and will qualify as regulatory AT1 capital.
The rating is subject to the receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents that Moody's has reviewed.
RATINGS RATIONALE
The Ba2(hyb) rating is positioned three notches below the bank's baseline credit assessment (BCA) and Adjusted BCA of baa2; in accordance with Moody's standard notching guidance for preferred securities with loss triggered at the point of non-viability on a contractual basis.
The three-notch difference from the Adjusted BCA reflects the probability of impairment associated with non-cumulative coupon suspension, as well as the likelihood of high loss severity when the bank reaches the point of non-viability.
Under the terms and conditions, the principal and any accrued but unpaid distribution on these capital securities would be written down, partially or in full, in the event that the Hong Kong Monetary Authority notifies the bank that without such write-off, the bank would become non-viable, or if the relevant government body, government officer or regulatory body decides to make a public sector injection of capital without which the bank would become non-viable. The amount of write-off has to be sufficient to ensure that the non-viability event ceases to continue.
In addition, to be classified as AT1 capital, Bank of East Asia, as a going concern, may choose not to pay distributions on a non-cumulative basis. As such, the distributions on these capital securities are fully discretionary. However, a common share dividend stopper applies, if a distribution is missed.
These securities are senior to common shareholders, but junior to all depositors, general creditors, senior debt and subordinated debt holders.
The bank's standalone credit assessment takes into account its sound liquidity profile and capitalization. Bank of East Asia's large and growing Mainland exposures weigh negatively on its credit profile.
The bank's long-term deposit ratings of A2 incorporate three notches of systemic support.
Its ratings carry a negative outlook, reflecting Moody's concerns that the Hong Kong government's (Aa1 stable) intention to limit the use of public funds in the resolution of distressed financial institutions — as indicated in the government's consultation paper for revising the bank resolution regime — will lead to a lower likelihood of support for Bank of East Asia.
Bank of East Asia's ratings are as follows:
- Long-term/short-term deposits ratings: A2/P-1
- Senior unsecured debt: A2
- Senior unsecured MTN programme rating: (P)A2
- Legacy subordinated debt: Baa3(hyb)
- PONV subordinated debt: Ba1(hyb)
- Subordinated MTN programme rating: (P)Ba1
- Senior unsecured commercial paper: P-1
- Counterparty Risk Assessment: A1(cr)/P-1(cr)
- Baseline credit assessment: baa2
- Adjusted baseline credit assessment: baa2
The outlook on the bank's deposit and senior unsecured ratings is negative.
What could change the ratings up/down
The rating of this capital securities could be upgraded if Bank of East Asia's BCA is adjusted upwards. If the bank can maintain good asset quality and effective risk controls — against the backdrop of the current challenging credit environment in China — and maintain consistent strong capitalization levels following its share placement with Sumitomo Mitsui Banking Corporation (A1 stable), its standalone assessment may be upgraded.
Conversely, downward pressure on the rating of this instrument could materialize if Bank of East Asia's BCA were adjusted downwards.
The bank's BCA may be adjusted downwards if strong loan and asset growth outpace capital generation, leading to a tangible common equity/risk weighted assets ratio below 10.5%.
Further material increases in Mainland exposures, or a worse than expected economic slowdown in Hong Kong and China may also trigger a review for downgrade.
A significant deterioration in the bank's asset quality metrics, with impaired loans exceeding 1.5%, may also trigger a review for a downward adjustment.
The principal methodology used in this rating was Banks published in March 2015. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
Bank of East Asia, Limited, headquartered in Hong Kong, held total assets of HKD816 billion at 30 June 2015.

3 則留言:

  1. bought @95.5, yield to call=6.7%, YTM=5.76%, duration=4.12/15.76

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    回覆
    1. 購買理由:
      1) 由低位回升仍然比2015年11月發售時低水5%,5.76% YTM is attractive! 是入手時機。
      2) Likely to be called in 2020.
      3) Adequately capitalised
      Bank of East Asia recently reported full-year results (for end-Dec 2015), and while earnings were not particularly stellar, the bank still managed to record a healthy HKD5.638b full-year profit, albeit representing a drop from the HKD6.774b in FY2014. More importantly from an AT1 bondholder’s perspective, Bank of East Asia managed to improve its Common Equity Tier 1 capital ratio, Tier 1 capital ratio and Total capital ratio from a year ago , representing a healthier capital position.

      Bank of East Asia capital ratios 2015 2014
      Common Equity Tier 1 capital ratio 12.2% 11.8%
      Tier 1 capital ratio 13.7% 12.5%
      Total Capital ratio 17.2% 16.7%

      4) The loss absorption features have no specified trigger point, and an impairment will only be required in the event that the banking regulator deems Bank of East Asia to be “non-viable” or if the bank requires a public sector bailout.

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    2. Rating Action: Moody's revises outlook of three Hong Kong banks to negative; downgrades Bank of East Asia The document has been translated in other languages
      Global Credit Research - 17 Mar 2016
      Hong Kong, March 17, 2016 -- Moody's Investors Service has today revised to negative from stable the rating outlook on three Hong Kong banks.
      The rating action reflects Moody's expectations of a more challenging operating environment for banks in Hong Kong.

      On 12 March 2016, Moody's changed the outlook on Hong Kong government's Aa1 sovereign rating to negative from stable. The revision of the sovereign outlook reflects our concern that Hong Kong's increasing economic and financial linkages with China (Aa3, negative) give rise to potential negative spillovers from China and ultimately weaker growth.
      In addition, Hong Kong banks continue to operate in an environment with pronounced imbalances, including high private-sector leverage and elevated property prices. The more challenging operating environment has been reflected in Moody's change of Hong Kong's Macro Profile to "Strong" from "Strong+".
      The banks affected are The Hongkong and Shanghai Banking Corporation Limited (HSBC), Hang Seng Bank Limited, and Dah Sing Bank, Limited.
      At the same time, Moody's has affirmed their baseline credit assessments (BCA), adjusted BCAs, counterparty risk assessments (CR Assessments), and ratings at current levels.
      In addition, Moody's has downgraded Bank of East Asia's long-term and short-term deposit ratings to A3/Prime-2 from A2/Prime-1. Moody's has also downgraded its long-term senior unsecured debt rating to A3; senior unsecured commercial paper rating to Prime-2; and long-term CR Assessments to A2(cr). The outlook on all ratings remains negative.
      Concurrently, Moody's has affirmed the bank's BCA, adjusted BCA, subordinated debt and non-cumulative preference stock ratings, and short-term CR Assessment.
      Outlooks, which provide an opinion on likely rating direction over the medium term, are assigned only to banks' long-term deposit, issuer and senior unsecured debt ratings.

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