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Standard Chartered offers US dollar AT1 bonds at 8% area

Reuters - UK Focus

By Daniel Stanton

SINGAPORE, Jan 11 (IFR) - Standard Chartered Plc (BSE: 580001.BO - news) is offering US dollar Additional Tier 1 securities at yield guidance of 8 percent area.

The perpetual securities are callable in April 2023. The 144A/Reg S deal is indicated at benchmark size and pricing is expected today.

If the bonds are not called, the interest rate will reset to the initial spread over five-year US Treasuries, and will reset every five years thereafter.

The bonds will convert into equity if the bank's core equity Tier 1 capital ratio drops below 7 percent.

Expected ratings for the notes are Ba1/BB-/BB+.

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Bank of America Merrill Lynch, BNP Paribas (LSE: 0HB5.L - news) , Citigroup (NYSE: C - news) and Standard Chartered are joint lead managers.

In November, StanChart (HKSE: 2888-OL.HK - news) surprised the credit market by announcing that it would not redeem its old-style Tier 1 bonds which are callable this month. Those perpetual preferred bonds paid a coupon of 6.409 percent, falling to 151bp over Libor after the call date. (Reporting by Daniel Stanton; Editing by Vincent Baby)