Type	Announcement
Subject	MALAYAN BANKING BERHAD - USD SUBORDINATED BONDS

Contents :

USD SUBORDINATED BONDS OF UP TO USD500.0 MILLION
- Announcement to the Kuala Lumpur Stock Exchange

1. INTRODUCTION

Further to the announcement by Malayan Banking Berhad (“Maybank”) dated April 2, 2002, Aseambankers Malaysia Berhad on behalf of Maybank is pleased to announce that Maybank had priced its USD Subordinated Bonds at 1.73% over the prevailing 5 year US Treasury rate (“Bonds”). The issue size of the Bonds is USD380 million and the Subscription Agreement relating thereto was signed on May 30, 2002.

Due to the overwhelming response for the offering which resulted in the Bonds being oversubscribed by more than 3.0 times from the earlier announced issue size. Maybank decided to upsize the total amount of Bonds offered from USD300 million to USD380 million in order to meet investors’ requirements.

The net proceeds of the issue of the Bonds will be classified as Tier 2 Capital that will facilitate the existing USD operations of Maybank. In addition, it will be used to facilitate the diversification of the current USD source of funds.

2.2 Rating

The Bonds has been rated Baa2 By Moody’s Investors Service Limited., BBB by Fitch, Inc. and BBB- by Standard & Poor’s Rating Services.

2.3 Summary of Principal Terms of the Bonds Issue 

Instrument:	Subordinated Fixed Rate Bonds due 2012. The Bonds will be unsecured subordinated obligations of Maybank. The Bonds will qualify as Tier 2 capital of Maybank for purposes of Malaysian capital adequacy regulations.
Format:	Regulation S Eurobond.
Principal Amount:	USD380 million.
Settlement Date:	June 6, 2002.
Maturity Date:	July 6, 2012, subject to Call Option provision as set out below.
Issue Price:	99.8888: at a discount.
Interest:	6.125%, fixed rate, payable semi-annually in arrears, subject to the Revision of Interest.
Revision of Interest:	The Bonds, unless redeemed at the Call Option Date, shall bear an Interest Coupon equivalent to the 5 year US Treasury Rate plus 1.5% over the initial credit spread, from the sixth year onwards until the Final Redemption.
Call Option:	On the Call Option Date and subject to Bank Negara Malaysia’s approval, the Issuer will have the option to redeem the Bonds in whole but not in part at par on such Interest Payment Date.
Call Option Date:	July 6, 2007.
Final redemption:	The Bonds will be redeemed in full at par on the Maturity Date.
Form and Denomination:	The Bonds are in bearer form, serially numbered in denominations of USD1,000, USD10,000 and USD100,000,000 each with Coupons attached on issue.
Depositories:	Euroclear and Clearstream, Luxembourg.
Listing:	Luxembourg Stock Exchange.
Governing Law:	The Bonds and documentation will be governed by and construed in accordance with the laws of England and will provide for submission by the Issuer to the non-exclusive jurisdiction of the courts of England and the Issuer shall enter into customary waivers of immunity from suit, execution, attachment or other legal process. The provisions in respect of the subordination of the Bonds will be governed by and construed in accordance with the laws of Malaysia.
Selling Restrictions:	1. Malaysia: The issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase, the Bonds shall be made exclusively to persons outside Malaysia. 2. Others: Customary US, UK, Hong Kong, and Singapore and other selling restrictions apply. Rule 144A sale will not be permitted.

3. RATIONALE FOR THE BONDS ISSUE

The Bonds will qualify as Tier 2 capital of Maybank for purposes of Malaysian capital adequacy regulations.

4. EFFECTS OF THE BONDS ISSUE

The Bonds will not have any effects on the:-

(i) issued and paid-up capital;

(ii) substantial shareholdings structure; and

(iii) dividend rate

of Maybank.

The Bonds should not have any material effects on the:-

(i) net tangible assets based on the latest consolidated audited accounts for the financial year ended June 30, 2001; and

(ii) earnings for the financial year ending June 30, 2002.

of Maybank.

5. APPROVALS OBTAINED

(i) The Controller of Foreign Exchange’s approval was obtained on April 18, 2002 allowing Maybank to issue foreign currency bonds.

(ii) Bank Negara Malaysia’s approval was obtained on April 27, 2002 to classify the proceeds raised as Tier 2 Capital.

(iii) The Securities Commission’s (“SC”) approval obtained on May 17, 2002 allowing Maybank to issue the proposed Bonds is subject to the following:-

(a) any subsequent changes to the proposed terms and conditions approved by the SC shall require the approval of the SC;

(b) a copy of the final terms and conditions of the Bonds is to be forwarded to the SC prior to the issuance of the Bonds; and

(c) a copy of the final rating and rating rationale for the Bonds is to be forwarded to the SC prior to the issuance of the Bonds.

6. SUBSTANTIAL SHAREHOLDERS’ AND DIRECTORS’ INTEREST

None of the directors, substantial shareholders and/or person connected to the Directors and/or substantial shareholders of Maybank has any interest, direct or indirect, in the Bonds issue.

7. ADVISER

The Adviser for the Bonds is Aseambankers Malaysia Berhad.

8. JOINT LEAD MANAGERS

The Joint Lead Managers for the Bonds is Aseambankers Malaysia Berhad, Deutsche Bank AG and J.P. Morgan Europe Limited.

9. JOINT BOOKRUNNER

The Joint Bookrunner for the Bonds is Deutsche Bank AG and J.P. Morgan Europe Limited.

c.c. Securities Commission

 

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