OCBC Preference Shares, anyone?

[limpoop]

OCBC plans S$1 billion share sale: report - MarketWatch

OCBC plans S$1 billion share sale

Min $250,000
Payout 4%

 

[Shiny Things]

OCBC plans S$1 billion share sale: report - MarketWatch

OCBC plans S$1 billion share sale

Min $250,000
Payout 4%

Not for me. A 4% yield for 5.5-year bank pref shares seems pretty low - I'd rather own the common stock.

Update: On a related note, could some kind soul with a Bloomberg terminal tell me where OCBC 5yr senior and sub CDS are trading? I'd like to get an idea of how expensive (or cheap) that yield is, relative to the debt.

 

[tan1688]

4% nia, wah so little le, non cumulative some more,,,
even inflation is 5% per month .. 5.5 yrs tenor and 250K per size..

who would buy ?

 

[tarui04]

4% yield. but dividends not guaranteed? what does it mean??

 

[iCuteCube]

4% yield. but dividends not guaranteed? what does it mean??

Meaning non cumulative

 

[tarui04]

Meaning non cumulative

I mean so each year got 4% returns or not. I know it's semi annual and non cumulative

 

[Vincent_G]

Wah, you all sound like investor that has deep pocket of $250,000.. Scary sia..

 

[Shiny Things]

I mean so each year got 4% returns or not. I know it's semi annual and non cumulative

You do get 4% a year (it pays out like a bond), but OCBC can - if they run into trouble - elect not to pay the dividends. If they did that on a bond coupon payment, it'd be a default and the bank would go into windup.

The "non-cumulative" bit means that if they don't pay a dividend in one period, then it doesn't accumulate to the next period - you don't get a "double dividend" to make up for the one you missed.

 

[limpoop]

4% nia, wah so little le, non cumulative some more,,,
even inflation is 5% per month .. 5.5 yrs tenor and 250K per size..

who would buy ?

Heard over-subscribed by $1.xb and target has reached.

There are so many rich people in Singapore with lots of spare cash and $250k is like go supermarket and buy some meat.

 

[henrylbh]

Heard over-subscribed by $1.xb and target has reached.

There are so many rich people in Singapore with lots of spare cash and $250k is like go supermarket and buy some meat.

Can't understand why they go for this when they can buy existing ps at 103 with yield of near 5%.

 

[clearsky2007]

Can't understand why they go for this when they can buy existing ps at 103 with yield of near 5%.

Can advise which PS give a yield of 5% now? Can buy like 1 lot? and not 1 size of $250K?

 

[Majestic12]

Some clients bought it with the intention of offloading within a very short period of time.

 

[wiz]

This is very hot. U apply for 1mio and get nothing but too bad i dun have 1mio

 

[limster]

Can't understand why they go for this when they can buy existing ps at 103 with yield of near 5%.

after OCBC sells this, they will redeem the 5% one right? So you buy for 103, next day OCBC redeem for 100

 

[Shiny Things]

after OCBC sells this, they will redeem the 5% one right? So you buy for 103, next day OCBC redeem for 100

Actually, that raises an interesting question.

Update: DISREGARD THIS POST I AM AN IDIOT.

 

[thursday]

Nope, .

Actually, that raises an interesting question.

These new 4% prefs are callable in January 2018, and they're being issued at par - yielding 4%.

On the other hand, the outstanding 5.1% prefs are callable in September 2018, and they've been smashed down to 103.1 - yielding 4.8%.

So am I missing something, or are people selling out of a 2018 pref share yielding 4.8% to buy a 2018 pref share yielding 4%? And if so, what drugs are these people on?

The link provided is for OCC (current price 106.38) which is different from the one being smashed down.

 

[Shiny Things]

The link provided is for OCC (current price 106.38) which is different from the one being smashed down.

Oh, sorry - I'm an idiot. Amended the post.

Do you happen to have a link to the prospectus for the OCBC 5.1s so I can price 'em up properly?

 

[zer0ne]

I mean so each year got 4% returns or not. I know it's semi annual and non cumulative

Yes, you get 4% and if they don't pay dividend on this pref share, they cannot pay dividend to ordinary share. Very unlikely banks don't pay dividend in SG....but ****z might happen and who knows?

 

[zer0ne]

Can't understand why they go for this when they can buy existing ps at 103 with yield of near 5%.

This one going to expire on 29 July 2013 and if they going to redeem...you paid 103 for what? There is a reason why this one going near 100 value.

 

[lzydata]

List of all of OCBC's outstanding securities: OCBC - Investors - Shareholder Information - Fixed Income Securities

With stock quotes, the size of the preference share issue, and the earliest redemption date:

O16 OCBC 4.5% 500m 28 Jan 2013
O15 OCBC 4.2% 395m 14 Jul 2013
F4B OCBC 5.1% 1000m 29 Jul 2013

There is also a OCBC 3.78% subordinated notes due 2017 callable with step-up in 2012, 225m. The preference shares above do not have step-up features.