OCBC Bank (Malaysia) Berhad. Principal Terms and Conditions for Subordinated Bonds

Transcription

1 OCBC Bank (Malaysia) Berhad Principal Terms and Conditions for Subordinated Bonds 1.01 BACKGROUND INFORMATION (a) Issuer (i) Name : OCBC Bank (Malaysia) Berhad ( OCBC Malaysia or the Issuer ). OCBC Malaysia is a wholly-owned subsidiary of Oversea-Chinese Banking Corporation Limited ( OCBC Bank ). (ii) Address : Registered Address: 19th Floor, Menara OCBC 18, Jalan Tun Perak Kuala Lumpur Business Address: Menara OCBC 18, Jalan Tun Perak Kuala Lumpur (iii) Business registration no. (iv) Date/place of incorporation : W. : 13 April 1994/ Malaysia. (v) Date of listing (in case of a public listed company) : Not applicable. (vi) Status : Non-resident controlled company. Non-Bumiputera controlled company*. * as defined in Guidance Note 6 of the Issues Guidelines. (vii) Principal activities : The principal activities of OCBC Malaysia are banking and related financial services. The principal activities of the subsidiaries of OCBC Malaysia are lease financing, the provision of nominee services and Islamic banking business. 1

2 (viii) Board of directors : Board of Directors as at 31 May 2012 (1) Tan Sri Dato Nasruddin Bin Bahari (2) Mr Jeffrey Chew Sun Teong (3) Mr Samuel Nag Tsien (4) Dato Ooi Sang Kuang (5) Ms Tan Siok Choo (6) Mr Ching Wei Hong (7) YM Dr Raja Lope Bin Raja Shahrome (8) Mr Lai Teck Poh (9) Mr Darren Tan Siew Peng (ix) Structure of shareholdings and names of shareholders : As at 31 May 2012 Shareholder (ordinary shareholder) Oversea-Chinese Banking Corporation Limited Equity Interest 100% (x) Authorised and paid up capital : Authorised capital as at 31 May 2012 RM1,005,000,000 comprising 1,000,000,000 ordinary shares of par value of RM1.00 each and 5,000,000 class A non-cumulative non-convertible preference shares of RM1.00 each. Paid-up capital as at 31 May 2012 RM291,500,000 comprising 287,500,000 ordinary shares of par value RM1.00 each and 4,000,000 class A non-cumulative non-convertible preference shares of RM1.00 each. 2

3 1.02 PRINCIPAL TERMS AND CONDITIONS (a) Names of the parties involved in the proposed transaction (where applicable) (i) Principal adviser : OCBC Malaysia. (ii) Lead arranger : OCBC Malaysia. (iii) Co-arranger : Not applicable. (iv) Solicitor : Messrs Rahmat Lim & Partners. (v) Financial adviser : Not applicable. (vi) Technical adviser : Not applicable. (vii) Trustee : Malaysian Trustees Berhad. (viii) Guarantor : Not applicable. (ix) Valuer : Not applicable. (x) Facility agent : OCBC Malaysia. (xi) Primary subscriber (under a boughtdeal arrangement) and amount subscribed (xii) Underwriter and amount underwritten : Not applicable as the Subordinated Bonds will not be issued under bought deal arrangement. : The Subordinated Bonds are to be issued on nonunderwritten basis. (xiii) Central depository : Bank Negara Malaysia ( BNM ). (xiv) Paying agent : BNM. (xv) Reporting accountant : Not applicable. (xvi) Calculation agent : Not applicable. (xvii) Others (please specify) : 1. Lead Manager: OCBC Malaysia and/or such other persons as may be appointed by the Issuer. 3

4 2. Co-Lead Manager/Co-Manager: Such persons as may be appointed by the Issuer. 3. Bookrunner: OCBC Malaysia and/or such other persons as may be appointed by the Issuer. 4. Market Maker: Such persons as may be appointed by the Issuer. The role of the Market Maker shall include: a) to provide a two way price quotation for the Subordinated Bonds. b) to buy and sell the Subordinated Bonds based on the price quoted. (b) Facility description : Redeemable Subordinated Bonds for a nominal value of up to RM600.0 million (the Subordinated Bonds ). (c) Issue/programme size : Up to RM600.0 million. (d) Tenure of issue/debt programme (or facility) (e) Availability period of debt programme (or facility) (f) Interest/coupon rate (g) Interest/coupon payment frequency : 10 years from the date of issue (the Issue Date ) of the Subordinated Bonds (the Maturity Date ) but subject to the right to call pursuant to Redemption at the Option of OCBC Malaysia and Regulatory Event Redemption clauses herein. : Not applicable. For the avoidance of doubt, the Subordinated Bonds shall be issued in a single issuance within one (1) year from the date of Securities Commission s ( SC ) approval. : The coupon rate for the Subordinated Bonds from the Issue Date up to (but excluding) the date of early redemption or the Maturity Date of the Subordinated Bonds, whichever is earlier, shall be determined at the close of the book building exercise or private placement exercise. : Coupon in respect of the Subordinated Bonds shall be payable on dates that fall semi-annually in arrears from the Issue Date ( Coupon Payment Dates ) with the last Coupon Payment to be made on the Maturity Date. 4

5 (h) Interest/coupon payment basis (i) Security/collateral (if any) (j) Details on utilisation of proceeds : The coupon shall be calculated on an actual/365 days basis. : None. : The proceeds of the Subordinated Bonds shall be immediately available to the Issuer, without limitation, for its working capital, general banking and other corporate purposes. The Subordinated Bonds are intended to qualify as Tier 2 capital of OCBC Malaysia under the capital adequacy regulations of BNM and as Lower Tier 2 capital of OCBC Bank on a consolidated basis pursuant to the requirements of the Monetary Authority of Singapore ( MAS ). (k) Sinking fund and designated accounts (if any) : None. (l) Rating Credit rating assigned Name of rating agency : AA1. RAM Rating Services Berhad ( RAM ). (m) Mode of issue : Private placement and/or book-building. (n) Selling restrictions, including tradability (i.e. tradable or nontradable) : The Subordinated Bonds shall be tradable on the secondary market on a willing-buyer willing-seller basis under RENTAS operated by MyClear. At Issuance The Subordinated Bonds shall not be offered or sold, directly or indirectly in Malaysia other than to persons falling within any of the categories of persons or in the circumstances specified under i. Schedule 6 or Section 229(1)(b); or Schedule 7 or Section 230(1)(b) read together with 5

6 ii. Schedule 9 or Section 257(3) of the Capital Markets and Services Act 2007 ( CMSA ), as amended from time to time. After Issuance The Subordinated Bonds shall not be offered or sold, directly or indirectly in Malaysia other than to persons falling within any of the categories of persons or in the circumstances specified under i. Schedule 6 (or Section 229(1)); read together with ii. Schedule 9 (or Section 257(3)) of the CMSA, as amended from time to time. (o) Listing status and types of listing (p) Other regulatory approvals required in relation to the issue, offer of invitation and whether or not obtained : The Subordinated Bonds will not be listed on any stock exchange. : BNM s approval is required for the proposed issuance of Subordinated Bond and has via its letter dated 21 June 2012 approved OCBC Malaysia s application for issuance of the Subordinated Bonds. (q) Conditions precedent : Conditions precedent shall include but not be limited to the following: (i) (ii) (iii) (iv) All representations and warranties are true and correct in all material respects on the date of the Issue Documents; No Event of Default or event which, with the giving of notice or passage of time or both, would be an Event of Default, has occurred on the date of the Issue Documents; Delivery of OCBC Malaysia s Memorandum and Articles of Association, board resolution and other constitutional documents of OCBC Malaysia to the Lead Arranger ( LA ); Signed and where relevant, stamped copies of each of the Issue Documents (as defined in paragraph (u)(ix) below) which has been 6

7 executed by or on behalf of all the parties hereto, being delivered to the LA; (v) Written approval from BNM for the Subordinated Bonds to be classified as Tier 2 Capital; (vi) Written approval from the Securities Commission (the SC ) for the proposed issuance of the Subordinated Bonds; and (vii) A legal opinion from the solicitors addressed to the LA (a) as to the validity, legality and enforceability of the Issue Documents, and (b) confirming that all conditions precedent have been fulfilled in so far as the subject matter thereof are facts that are by their nature objective and the fulfillment of which may be confirmed from a legal perspective. (r) Representations and warranties : Representations and warranties shall include but not be limited to the following: (i) OCBC Malaysia (a) has been duly incorporated and validly exists under the Companies Act 1965 of Malaysia, and (b) has full power and authority to engage in the business of banking and finance in Malaysia and each other jurisdiction where it is so engaged and otherwise to own its properties and conduct its business; (ii) The Issue Documents have been duly authorised, executed and delivered and will constitute valid and binding obligations of OCBC Malaysia; (iii) (iv) No event has occurred which would constitute an Event of Default under the Trust Deed or which with the giving of notice or the lapse of time or other condition would (subsequent to the date of the Trust Deed) constitute an Event of Default; All consents, approvals, authorisations of any regulatory authorities which are required for the issue of the Subordinated Bonds and the performance of the obligations of OCBC 7

8 Malaysia under the Issue Documents have been obtained and are in full force and effect; and (v) OCBC Malaysia will comply with the conditions (if any) imposed by the relevant regulatory authorities in connection with the issuance of the Subordinated Bonds. (s) Events of default : Events of Default shall be limited to the following: (i) (ii) if the Issuer shall fail to pay any money owing in respect of the Subordinated Bonds (whether principal or coupon payment) when the same becomes due and such defaults continues for 7 business days from the date on which the payment becomes due and payable; and if a court order is made or an effective resolution is passed for the winding-up of the Issuer. Enforcement : Upon the occurrence of the Event of Default described in (i) above, subject to the terms of the Trust Deed, the sole remedy of the Trustee shall be to institute proceedings in Malaysia for the windingup of OCBC Malaysia, provided that neither the Trustee nor any of the bondholders shall have the right to enforce payment under or to accelerate payment of the Subordinated Bonds upon the occurrence of the Event of Default described in (i) under Event of Default above or any default by OCBC Malaysia in the performance of any condition, provision or covenant under the Subordinated Bonds or Trust Deed or the other ancillary agreements. Upon the occurrence of the Events of Default described in (ii) above, subject to the terms of the Trust Deed, the Trustee may by written notice to OCBC Malaysia declare that the Subordinated Bonds shall immediately become due and payable at their respective Principal amount together with accrued but unpaid coupons notwithstanding the stated maturity of the Subordinated Bonds. 8

9 (t) Covenants : Covenants on the part of the Issuer shall include but not be limited to the following: (i) (ii) Comply with all provisions of the Issue Documents and all other documentation under the Subordinated Bonds to which the Issuer is a party including but not limited to the Trust Deed in respect of the Subordinated Bonds; Immediately notify the Trustee in the event that OCBC Malaysia becomes aware of any of the following events: a) any Event of Default or where any other right or remedy under the terms, provisions and covenants of any of the Issue Documents or the terms and conditions of the Subordinated Bonds becomes immediately enforceable; b) any circumstances that would materially prejudice OCBC Malaysia s ability to perform its obligations under the Issue Documents or the Subordinated Bonds; c) any substantial change in the nature of the business of OCBC Malaysia; d) any change in the utilisation of the proceeds; e) any other matter that may materially prejudice the interests of the holders of the Subordinated Bonds; and f) any change in the withholding tax position or taxing jurisdiction of OCBC Malaysia; (iii) Maintain an accounting system and keep adequate and proper books and accounts at all times in compliance with applicable statutory requirements and in accordance with generally accepted accounting principles in Malaysia; 9

10 (iv) (v) (vi) (vii) (viii) (ix) (x) Deliver to the Trustee a copy of its annual audited accounts within 180 days after the end of each financial year and any other accounts, report, notice, statement or circular issued to OCBC Malaysia s shareholders; Deliver to the Trustee annually a certificate certifying that OCBC Malaysia has complied with its obligations under the Issue Documents and the terms and conditions of the Subordinated Bonds and that there did not exist or had not existed, from the Issue Date, any Event of Default and if such is not the case, to specify the same; Give to the Trustee any information which the Trustee may require in order to discharge its duties and obligations as trustee under the Trust Deed relating to OCBC Malaysia s affairs to the extent permitted by law; Exercise reasonable diligence in carrying out its business in a proper and efficient manner which should ensure, amongst others, that all necessary approvals or relevant licences necessary for such business are obtained; Maintain a paying agent in Malaysia; Procure that the paying agent shall notify the Trustee in the event that the paying agent does not receive payment from OCBC Malaysia on the due dates as required under the Trust Deed and the terms and conditions of the Subordinated Bonds; and Redeem in full all outstanding Subordinated Bonds in accordance with the terms and conditions of the Subordinated Bonds. (u) Provisions on buy-back and early redemption of bonds (i) Redemption at the option of OCBC Malaysia ( Call Option ) : OCBC Malaysia may, at its option, subject to the prior approval of BNM and MAS, redeem in whole, but not in part the Subordinated Bonds on the date falling on the fifth (5 th ) anniversary of the Issue Date 10

11 (ii) Regulatory event redemption : and on every Coupon Payment Date thereafter at 100% of the principal amount outstanding together with accrued Coupon Payment. If, as a result of: (i) a change or a proposed change to the relevant requirements issued by BNM in relation to the qualification of the Subordinated Bonds as Tier 2 capital of the Issuer or the relevant requirements issued by MAS in relation to the qualification of the Subordinated Bonds as Lower Tier 2 capital of OCBC Bank on a consolidated basis respectively, or (ii) (iii) any change in the application of the official or generally published interpretation of such relevant requirements issued by BNM, MAS or any relevant authority, including a ruling or notice issued by the BNM, MAS or any relevant authority, or any interpretation or pronouncement by BNM, MAS or any relevant authority that provides for a position with respect to such relevant requirements issued by BNM or MAS, as the case may be, that differs from the previously generally accepted position in relation to similar transactions or which differs from any specific written statements made by any authority regarding the qualification of the Subordinated Bonds as Tier 2 capital of the Issuer or as Lower Tier 2 capital of OCBC Bank on a consolidated basis, which change or amendment, (i) (ii) subject to (ii), below, becomes, or would become, effective on or after the issue date, or in the case of a change or proposed change in the relevant requirements issued by BNM or MAS, if such change is issued or is expected to be issued by BNM or MAS, on 11

12 or after the Issue Date, (collectively Regulatory Event ), the Subordinated Bonds would not qualify as Tier 2 capital of the Issuer or as Lower Tier 2 capital of OCBC Bank on a consolidated basis, as the case may be, the Issuer shall be entitled, subject always to the prior written approval of BNM and MAS, by giving not less than 30 days nor more than 60 days prior written notice (which notice shall be irrevocable) to the Trustee, the Paying Agent and the holders of the Subordinated Bonds, to redeem, on any Coupon Payment Date prior to the Maturity Date, all (and not a part) of the Subordinated Bonds at their principal amount together with any coupon accrued from (and including) the issue date up to (but excluding) the date of early redemption of the Subordinated Bonds in accordance with the terms and conditions of the Subordinated Bonds (where applicable). Prior to the publication of any notice of redemption pursuant to this clause, the Issuer will deliver to the Trustee a certificate signed by an authorized officer of the Issuer stating that a Regulatory Event has occurred and the Trustee will be required to accept such certificate without any further inquiry as sufficient evidence of the satisfaction of the conditions set out above without liability to any person in which event it shall be conclusive and binding on the holders of the Subordinated Bonds. Upon expiry of such notice, the Issuer will be required to redeem the Subordinated Bonds in accordance with this clause. (v) Other principal terms and conditions for the issue : (i) Status The Subordinated Bonds shall constitute direct, unsecured and subordinated obligations of OCBC Malaysia, subordinated in right and priority of payment (in respect of principal and coupon), to the extent and in the manner provided for in the terms and conditions governing the Subordinated Bonds, to all deposit liabilities and other liabilities of the 12

13 (ii) Minimum level of subscription Issuer, except all other present and further unsecured and subordinated obligations of the Issuer which by their terms rank pari passu in right of and priority of payment with or subordinated to the Subordinated Bonds. The rights and claims of the Subordinated Bonds holders are subordinated as described below. Upon occurrence of any winding-up proceeding, the rights of holders of the Subordinated Bonds to payment of principal and coupon on the Subordinated Bonds and any other obligations in respect of the Subordinated Bonds are expressly subordinated and subject in right of payment to the prior payment in full of all claims of Senior Creditors (as defined below) and will rank senior to all share capital of OCBC Malaysia and Tier 1 capital of OCBC Malaysia pursuant to the requirements of BNM. The Subordinated Bonds will rank pari passu with all Subordinated Bonds and other subordinated debt issued by OCBC Malaysia that qualifies as Tier 2 capital pursuant to the requirements of BNM. Senior Creditors for this purpose means creditors of OCBC Malaysia (including OCBC Malaysia s depositors) other than those whose claims are expressed to rank pari passu with or junior to the claims of the holders of the Subordinated Bonds. : For issuance via book building: 5% of the Subordinated Bonds. For issuance via private placement: 100% of the Subordinated Bonds. In the event any issue, offer or invitation of the Subordinated Bonds is undersubscribed and the Minimum Level of Subscription is not met, the proposed issuance shall be aborted and where applicable, any consideration received for the purpose of subscription must be immediately returned to the respective subscribers/placees. (iii) Form and denomination : The Subordinated Bonds shall be issued in accordance with: (i) the Participation and Operational Rules for 13

14 Payments and Securities Services issued by Malaysia Electronic Clearing Corporation Sdn Bhd ( MyClear ) ( MyClear Rules ); and (ii) the Operational Procedures for Securities Services and Operational Procedures for Real Time Electronic Transfer of Funds and Securites ( RENTAS ) both issues by MyClear ( MyClear Procedures ), or their replacement thereof (collectively the MyClear Rules and Procedures ) applicable from time to time. The Subordinated Bonds shall be issued in bearer form in the minimum denomination and multiples of RM1,000,000 at the time of issuance or such other denomination as determined or allowed by BNM. The Subordinated Bonds shall be represented by a global certificate to be deposited with the BNM and which will be exchanged for definitive bearer certificates only in certain limited circumstances. (iv) Payment : All payments in respect of the Subordinated Bonds will be made by the Paying Agent on behalf of OCBC Malaysia in immediately available funds. All payments in respect of the Subordinated Bonds will be made without withholding or deductions (for or on account of any present and future tax duty or charge of whatsoever nature imposed or levied by or on behalf of the Government of Malaysia, or any authority thereof or therein having power to tax and whether in respect of set-off, counter claim, duties, taxes, charges or otherwise whatsoever), unless such withholding or deduction is required by law. If a deduction or withholding is required by law to be made by OCBC Malaysia, OCBC Malaysia will have no obligation to gross up on any payment to relieve any payee of such deduction or withholding in respect of the Subordinated Bonds or to pay any additional amounts in respect of any such deduction or withholding for payments of Principal amount and Coupon Payment for or on account of any such taxes or duties. (v) Waiver of set-off : No holder of the Subordinated Bonds may exercise, 14

15 right; payment void claim or plead any right of set-off, counter-claim, deduction, withholding or retention in respect of any amount owed to it by the Issuer arising under or in connection with the Subordinated Bonds, and no holder of the Subordinated Bonds shall set-off, deduct, withhold or retain any amount owing by it to the Issuer against any amount owing to it by the Issuer under the Subordinated Bonds. Each holder of the Subordinated Bonds, by his acceptance of the Subordinated Bonds, shall be deemed to have waived all such rights of set-off, counter-claim, deduction, withholding or retention to the fullest extent permitted by law. If at any time any holder of the Subordinated Bonds receives payment or benefit of any sum in respect of the Subordinated Bonds as a result of the exercise or carrying into effect of any such set-off, counterclaim, deduction, withholding or retention (whether or not such exercise or carrying into effect is mandatory under applicable law), or if at any time any holder of the Subordinated Bonds receives payment or benefit of any sum in respect of the Subordinated Bonds other than in accordance with the provisions described below under Enforcement Events, the payment of such sum or receipt of such benefit shall, to the fullest extent permitted by law, be deemed void for all purposes and such holder of the Subordinated Bonds, by acceptance of any Subordinated Bonds, shall agree as a separate and independent obligation that any such sum or benefit so received shall be paid or returned by such holder of the Subordinated Bonds to the Issuer upon demand by the Issuer or, in the event of the winding-up of the Issuer, the liquidator of the Issuer, whether or not such payment or receipt shall have been deemed void hereunder. Any sum so paid or returned shall then be treated for purposes of the Issuer's obligations as if it had not been paid by the Issuer, and its original payment or the original benefit previously received by the relevant holder of the Subordinated Bonds as a result of any such set-off, counterclaim, deduction, withholding or retention shall be deemed not to have discharged any of the obligations of the Issuer in relation to the Subordinated Bonds. 15

16 (vi) Further issues (vii) Documentation : The Issuer may from time to time raise additional subordinated bonds which contain different or additional rights for the holders of the Subordinated Bonds thereof including acceleration rights provided that such subordinated bonds rank pari passu in right and priority of payment with or subordinated to the Subordinated Bonds in the case of any distribution of assets in any winding up of the Issuer. : The Subordinated Bonds shall be evidenced interalia, by the following: (i) (ii) (iii) (iv) Subscription Agreement/Letter(s); Trust Deed; Securities Lodgement Form; and Any other financing documents as may be advised by the Issuer s solicitors. These documents are collectively referred to as Issue Documents. (viii) Governing law and jurisdiction : The laws of Malaysia and the exclusive jurisdiction of the courts of Malaysia. 16