21 March 2016
Clifford Chance advises ABN AMRO on landmark first ever Formosa Tier 2 bond following rule change
On 16 March 2016 ABN AMRO Bank N.V. ("ABN AMRO"), became the first non-Taiwan issuer to successfully enter the Formosa market with Tier 2 funding, pricing a USD300 million 15-year bullet. It is the first time that a foreign financial institution has entered the onshore Taiwanese market with such a debt issue, with Standard Chartered Bank and HSBC Bank acting as the joint lead managers of the debut deal. This debut capital issuance is also ABN AMRO's first Tier 2 capital raising from the Asian markets since 2012. It is also the longest dated Tier 2 capital issuance from the ABN AMRO under CRD IV.
ABN AMRO made its debut in the Formosa market on 3 March when Standard Chartered delivered the inaugural trade, a USD240 million two-part Senior bond issue, quickly followed by a USD60 million 5-year Senior bond. The Senior bonds and the Tier 2 bonds will be listed on the Taipei Exchange on 8 April 2016.
Regulations were changed in Taiwan in January 2016 allowing foreign FIGs to issue subordinated debt onshore, therefore allowing local investors to use their domestic funds for investments. Issuers are only eligible if they have issued senior Formosa debt in the past and are also required to use the same issuing entity as the senior debt to sell the Tier 2 debt. The transaction was anchored by strategic "buy and hold" life insurance investors, all of whom placed orders in excess of USD50 million.
The Clifford Chance team that advised ABN AMRO was led by Jurgen van der Meer and furthermore consisted of Hugo van der Molen and Mukesh Hoeba (Amsterdam) and Mark Chan (Hong Kong).