Banks Poised to Float Massive Amount of Financial Bonds

Taipei, March 4, 2011 (CENS)--HSBC (Taiwan) has just set the price for its plan to float NT$18.3 billion of primary-lien financial bonds, the largest corporate-bond issuance so far this year, amid wave of financial-bond issuances expected this year.

A number of domestic banks also plan to complete price fixing for their subordinated financial bonds this week, including Chang Hwa Bank, Taipei Fubon Bank, Ta Chong Bank, and Bank SinoPac. Other banks have obtained the nod of approval from their boards of directors for financial-bond issuance plans, including Yuanta Bank, Cathay Bank, and Taiwan Cooperative Bank.

A major purpose for the issuance plan of HSBC is to fund expansion of loaning business, due to its slower growth in solicitation of deposits, which results mainly from limited number of branches island-wide. An HSBC (Taiwan) executive noted that fund to be raised from the financial bonds will be used for medium- and long-term operating fund and support various development projects, including expansion of realty and other loan extensions, following its upgrading to a subsidiary.

The financial-bond issuance of HSBC is the largest one ever among foreign banks and will have five different terms: five, 4.75, four, 3.75, and three years.

Meanwhile, Chang Hwa Bank has also just completed price fixing for its plan to issue NT$3.3 billion subordinated bonds, while Taipei Fubon Bank, Ta Chong Bank, and Bank SinoPac are undertaking book building, a process for price fixing for bond issuance, for their financial-bond plans.

The financial-bond plan of Yuanta Bank reaches NT$17.5 billion in scale, compared with NT$10 billion of First Bank, NT$20 billion of Cathay United Bank, and NT$15 billion of Taiwan Cooperative Bank.