15 September 2003

Freshfields Bruckhaus Deringer advises Wing Hang Bank on US$275m subordinated debt issue

On 10 September Wing Hang Bank closed its US$275 lower tier II debt issue, the first to be issued by Wing Hang and also the first issue from any bank listed in Hong Kong since May 2002, when Citic Ka Wah Bank launched a US$250m perpetual guaranteed note issue callable in 2012. 
The proceeds of the issue will be used in part to finance the acquisition of Chekiang First Bank, which was first announced in July.  Freshfields Bruckhaus Deringer advised Wing Hang on the debt issue as well as on the purchase of Chekiang First Bank for HK$4.8bn.  The tier II bond has a stated maturity of 10 years and one month and Wing Hang has the option to call the bond on 10 October 2008. The bond will pay fixed semi-annual coupons of 5.250per cent for five years and one month until the date on which it becomes callable. If it is not called, the coupon converts into a floating rate that will be priced at 275 basis points over the prevailing US Treasury Rate.

Following the completion of the purchase, Chekiang First Wing Hang Bank will be ranked the 4th largest bank listed in Hong Kong by assets.

Rob Ashworth, head of Freshfields Bruckhaus Deringer’s corporate practice in Asia, led the firm’s team. Patrick Lines led the team advising on the sub debt issue. Commenting on the deal, Ashworth said, “We are delighted to have acted for Wing Hang on the Chekiang First deal as well as on the related tier II financing.  Both transactions have been very well received in a market that is currently seeing a number of mergers and financing activities.  Having also acted on the recent US$1bn upper tier II issue of subordinated notes for UOB we are hopeful of attracting further work in this area.”

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