Overseas Chinese Banking Corporation (OCBC Bank)

The rating agency is comfortable with the deal...

OCBC 'AA-/A-1+' ratings affirmed on acquisition Of Wing Hang Bank: S&P
02 Apr 2014 11:23
On April 1, 2014, Standard & Poor's Ratings Services affirmed its 'AA-' long-term and 'A-1+' short-term issuer credit ratings on Singapore-basedOversea-Chinese Banking Corp Ltd. (OCBC). The outlook on the long-term rating is stable. S&P also affirmed our 'axAAA/axA-1+' ASEAN regional scale rating on OCBC. In addition, we affirmed all the issue ratings on the bank's debt.

S&P affirmed the rating because they believe OCBC's financial profile will remain unaffected despite the bank's proposed acquisition of Hong Kong-based Wing Hang Bank Ltd. S&P believes OCBC will continue to benefit from its strong marketposition and solid funding profile.

OCBC's risk-adjusted capitalisation could become strained because of the significant amount of goodwill from the acquisition and, to a lesser extent, the higher economic risk associated with Wing Hang's China operations. S&P believes OCBC will raise capital to maintain capital ratios appropriate for the "adequate" category.
...
Source: Business Times Breaking News

Three banks are providing a fully underwritten $4.95 billion bridge loan to Singapore's Overseas-Chinese Banking Corp Ltd (OCBC) to fund its offer to buy Hong Kong-based Wing Hang Bank, according to sources close to the matter.

Bank of America Merrill Lynch (BofA), HSBC and J.P. Morgan are sharing equal underwriting of the loan, the sources said, which will have a 12-month tenor.

The size of the loan, which is the same as OCBC's all-cash offer for Wing Hang <0302.HK>, shows how hungry lenders in the region have become to book assets and finance large acquisitions.

BofA , HSBC <0005.HK>, and J.P. Morgan declined to comment. OCBC did not return a call seeking comment.

OCBC said on Tuesday that it has agreed to buy Wing Hang for HK$125 per share, or $4.95 billion, in a deal that would give the Singapore lender a much sought-after gateway to the Greater China region.

The sources said the bridge will be taken out by capital markets fundraisings to be determined later this month. OCBC said on Tuesday that it planned to raise equity but did not give more details.

OCBC's bridge loan will be the second such banking acquisition-related loan in Hong Kong in recent months.



https://sg.uobkayhian.com/page/SLQG_News...D=20618039

<vested-oldpot>

The deal seems fair, in the eyes of analysts and shareholders...

(not vested)

OCBC’s Wing Hang bid seems fair, says Aberdeen

SINGAPORE — Oversea-Chinese Banking Corp’s HK$38.4 billion (S$6.2 billion) offer for Hong Kong’s Wing Hang Bank seems fair on both sides, said Aberdeen Asset Management, which owns at least 7 per cent of both companies.

OCBC’s strategy to expand its business in Greater China seemed sensible, Mr Hugh Young, a Singapore-based Managing Director at Aberdeen Asset, said during a phone interview yesterday. “We’re fairly relaxed about the whole thing. Only time will tell whether it’s a good deal.”

Mr Young declined to comment on whether Aberdeen, Europe’s largest publicly-traded money manager, would accept OCBC’s offer. The Singaporean lender has already agreed to buy shares amounting to a 2.5 per cent stake in Wing Hang from Aberdeen, OCBC said on Tuesday.

Aberdeen owned 7 per cent in Wing Hang as of March 26, and 7.7 per cent of OCBC’s shares as of March 6.
...
http://www.todayonline.com/business/ocbc...s-aberdeen

Fitch Places OCBC on Watch Negative on Wing Hang Bank Takeover Plan <0302.HK><OCBC.SI>


SINGAPORE, April 02 (Fitch) Fitch Ratings has placed Singapore-based Oversea-Chinese Banking Corp's (OCBC) Long-Term and Short-Term Issuer Default Ratings (IDR), and Viability Rating (VR) on Rating Watch Negative (RWN). At the same time, the agency has also affirmed OCBC's '1' Support Rating (SR) and 'A-' Support Rating Floor (SRF). A full list of rating actions is at the end of this rating action commentary.

https://sg.uobkayhian.com/page/SLQG_News...D=20627037

I'm still pretty bullish on OCBC's long term fundamentals, added another 5 lots today
Target price at least $10

You've added 5 lots today ..... so I am guessing that you have decided that there won't be any rights issue placement ?

Am I correct to assume that?

(03-04-2014, 11:34 AM)felixleong Wrote: I'm still pretty bullish on OCBC's long term fundamentals, added another 5 lots today
Target price at least $10

(03-04-2014, 12:09 PM)flinger Wrote: You've added 5 lots today ..... so I am guessing that you have decided that there won't be any rights issue placement ?

Am I correct to assume that?

(03-04-2014, 11:34 AM)felixleong Wrote: I'm still pretty bullish on OCBC's long term fundamentals, added another 5 lots today
Target price at least $10

Can not be lah. i think right issue (hope it's renounceable) will be sooner or later. So now "vested interests" must see that the price is well supported lah.
i think this time, market's sentiments is different from when DBS bought over DAO HENG.
i think my chance of purchasing NPRs and subscribe for the mother shares is diminshing by the day if bull market still intact.

Anyway, this is my sentiment.
TECHNICALS & FUNDAMENTALS?
Don't bother now.

(03-04-2014, 12:30 PM)Temperament Wrote:

(03-04-2014, 12:09 PM)flinger Wrote: You've added 5 lots today ..... so I am guessing that you have decided that there won't be any rights issue placement ?

Am I correct to assume that?

(03-04-2014, 11:34 AM)felixleong Wrote: I'm still pretty bullish on OCBC's long term fundamentals, added another 5 lots today
Target price at least $10

Can not be lah. i think right issue (hope it's renounceable) will be sooner or later. So now "vested interests" must see that the price is well supported lah.
i think this time, market's sentiments is different from when DBS bought over DAO HENG.
i think my chance of purchasing NPRs and subscribe for the mother shares is diminshing by the day if bull market still intact.

Anyway, this is my sentiment.
TECHNICALS & FUNDAMENTALS?
Don't bother now.

base on my on calculations (I may be wrong or inaccurate) they need about 3 bil like that... even if rights, wouldn't be too pain
say 1 rights per 10 shares at $9 (something like that), still easily tankable.
Market previously was really overreacting, sending it down from $11.20 to 9.xx levels

market sentiments wise, sti is rallying as we have seen it take off from 3000 level up to breaking pass 3200 level which I'm taking it as a bullish sign(I may be wrong and the bear may come back)

as 1/3 of the STI are our 3 local banks, my overall bullishness it reflected in my purchase. Do note I am also positive on DBS too, of the 3 local banks I just don't like UOB maybe because its controlled by the Wee family and I feel they are more focus on rewarding themselfs instead of shareholders (UOB CEO salary is 9 mil!)

Overall at 12 times earnings or less, I still feel banks are a good long term bet. Rights issue will still remain as an overhang but if you have deep wallets, this issue wouldn't pose as a serious issue.

Also by taking a position in OCBC should mean u have a positive long term view in the growth of the China economy.

I spoke about OCBC at around the $9.30 level currently it has gone up to $9.70 level
you can read about my previous post at http://stockbrokerplayspoker.blogspot.sg...cheap.html

(03-04-2014, 01:17 PM)felixleong Wrote:

(03-04-2014, 12:30 PM)Temperament Wrote:

(03-04-2014, 12:09 PM)flinger Wrote: You've added 5 lots today ..... so I am guessing that you have decided that there won't be any rights issue placement ?

Am I correct to assume that?

(03-04-2014, 11:34 AM)felixleong Wrote: I'm still pretty bullish on OCBC's long term fundamentals, added another 5 lots today
Target price at least $10

Can not be lah. i think right issue (hope it's renounceable) will be sooner or later. So now "vested interests" must see that the price is well supported lah.
i think this time, market's sentiments is different from when DBS bought over DAO HENG.
i think my chance of purchasing NPRs and subscribe for the mother shares is diminshing by the day if bull market still intact.

Anyway, this is my sentiment.
TECHNICALS & FUNDAMENTALS?
Don't bother now.

base on my on calculations (I may be wrong or inaccurate) they need about 3 bil like that... even if rights, wouldn't be too pain
say 1 rights per 10 shares at $9 (something like that), still easily tankable.
Market previously was really overreacting, sending it down from $11.20 to 9.xx levels

market sentiments wise, sti is rallying as we have seen it take off from 3000 level up to breaking pass 3200 level which I'm taking it as a bullish sign(I may be wrong and the bear may come back)

as 1/3 of the STI are our 3 local banks, my overall bullishness it reflected in my purchase. Do note I am also positive on DBS too, of the 3 local banks I just don't like UOB maybe because its controlled by the Wee family and I feel they are more focus on rewarding themselfs instead of shareholders (UOB CEO salary is 9 mil!)

Overall at 12 times earnings or less, I still feel banks are a good long term bet. Rights issue will still remain as an overhang but if you have deep wallets, this issue wouldn't pose as a serious issue.

Also by taking a position in OCBC should mean u have a positive long term view in the growth of the China economy.

I spoke about OCBC at around the $9.30 level currently it has gone up to $9.70 level
you can read about my previous post at http://stockbrokerplayspoker.blogspot.sg...cheap.html

It's alright as long as money in the market is marked for long term investment, if necessary. Never for short term unless you are good at "hit and run" trading investments.

Not too sure whether will reach 10 dollar.
Resistance 9.70.
Need to break 9.70 then can go further.