Frenzied demand pushes StanChart AT1 book above US$17bn

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By Helene Durand

LONDON, Aug 11 (IFR) - Standard Chartered (HKSE: 2888.HK - news) has attracted over US$17bn of orders for its Additional Tier 1 deal, the biggest book for such a transaction from a European lender so far in 2016.

The UK bank started marketing the transaction in Asian market hours where it benefits from a strong name recognition, and revised guidance to 7.625% area from the initial 8% area.

It is the second UK lender to draw substantial demand for Additional Tier 1 capital this week after RBS (LSE: RBS.L - news) 's 8.625% US$2.65bn perpetual non-call five-year attracted US$15bn of orders.

The combined US$32bn of demand is an amazing turnaround for the asset class that had been deemed unviable after a violent sell-off in February that saw the Bank of America Merrill Lynch CoCo index hit a year-high yield of 7.25%. It has since recovered and is now quoted at 5.81%.

Standard Chartered bonds will convert into equity if the bank's Common Equity Tier 1 ratio falls below 7%.

Standard Chartered, Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs (NYSE: GS-PB - news) , Societe Generale (Swiss: 519928.SW - news) and UBS (LSE: 0QNR.L - news) are joint lead managers.

The bonds are expected to be rated Ba1/BB-/BBB- (Moody's/S&P/Fitch). (Reporting by Helene Durand, editing Alex Chambers, Ian Edmonsson)