Standard Chartered sets yield at 6.5% on inaugural CoCo

By Helene Durand

LONDON, March 26 (IFR) - Standard Chartered (HKSE: 2888.HK - news) has set the yield on an inaugural Additional Tier 1 bond issue at 6.5%, the tight end of guidance, according to a lead manager.

The issuer started marketing the US dollar perpetual non-call five-year bond at high 6%, which was revised to 6.75% area as demand grew to over US$15bn.

The trade has an expected rating of Ba1/BB/BBB and is being offered under the 144A/Reg S format. The notes convert into equity if the bank's Common Equity Tier 1 ratio falls below 7%.

Standard Chartered had an end point CET1 ratio of 10.7% at December 2014. It has a CET1 target of 11 to 12% for 2015, according to its annual results presentation.

Barclays (LSE: BARC.L - news) and Standard Chartered are structuring advisers. They are also joint lead managers with Bank of America Merrill Lynch, Goldman Sachs (NYSE: GS-PB - news) , JP Morgan and UBS (NYSEArca: FBGX - news) .

The deal is expected to price in today's US session. (Reporting by Helene Durand; editing by Sudip Roy)