Hong Leong Bank Malaysia - News & Update

Hong Leong Bank Berhad ("Hong Leong Bank") is pleased to announce that it has completed its inaugural Ringgit issuance of RM700 million Tier 2 Subordinated Debt ("Sub Debt") on 10 August 2010.

The Sub Debt, rated AA2 by RAM Rating Services Berhad, has a maturity of 10 years. Subject to Bank Negara Malaysia's approval, Hong Leong Bank has the option to redeem the Sub Debt early at the end of year 5 and on each subsequent coupon payment dates thereafter.

The Sub Debt, which pays a coupon of 4.85% p.a., also marks the first ever tier 2 sub debt in Malaysia which does not have a step up coupon rate after call option date. Under the Basel 3 proposal by the Basel Committee on Banking Supervision, tier 2 sub debt shall not have any incentives for the Issuer to redeem early. A step up coupon rate after call date is generally viewed as an incentive to redeem."Despite the no step up feature, the Sub Debt received overwhelming response from a wide array of investors totalling over 40 accounts. Final book was more than 8 times subscribed with total order exceeding RM5.0 billion, and final pricing came in well within the lower end of the initial price guidance of 4.85%-5.05%.", says Yvonne Chia, the Group Managing Director of Hong Leong Bank Berhad.

"The success of the transaction is also a reflection of investors' confidence in Hong Leong Bank and our business model.Clearly,this success reflects very well on the financial resilience and credit strengths and strong liquidity franchise of Hong Leong Bank. Overall, we are very pleased with the results and the efforts by the Joint Lead Managers" adds Yvonne Chia.

Proceeds from the issuance of the Sub Debt are for working capital purposes. The Sub Debt issuance also further reinforced the bank's capital adequacy following redemption of the USD200 million sub debt on 3 August 2010.

CIMB Investment Bank Berhad and Hong Leong Investment Bank Berhad are the Joint Lead Managers for the Sub Debt.

-END-Press Release - 10/08/2010