OCBC Issues £1 Billion in Floating Rate Covered Bonds Due 2029

OCBC has issued £1 billion in floating rate covered bonds due 2029. The bonds will be priced at the compounded daily Sterling Overnight Index Average (Sonia) rate, plus 0.48% per annum payable quarterly in arrear. This means that interest payments will be adjusted daily based on the average overnight lending rate between banks and financial institutions.

The Sonia rate is a benchmark for short-term interest rates in sterling-denominated markets. The bonds are issued under OCBC's US$10 billion global covered bond programme, with net proceeds going towards general corporate purposes. Moody's Investors Services and Fitch Ratings have both assigned top ratings to the bonds, with Aaa and AAA respectively.

The payment of interest and principal on these bonds will be guaranteed by Red Sail, a special purpose vehicle backed by a portfolio of assets purchased from OCBC. Several major banks served as joint lead managers for the transaction, including Barclays Bank, Lloyds Bank Corporate Markets, RBC Europe, HSBC (Singapore Branch), and The Toronto-Dominion Bank.