New Issue: Luso International issues $280 million subordinated tier 2 capital bonds due 2034

By William Gullotti

Buffalo, N.Y., Nov. 30 – Luso International Banking Ltd. issued $280 million of tier 2 capital bonds due May 29, 2034 at par, according multiple listing documents on Thursday.

The subordinated bonds come with a non-viability loss absorption feature, permitting the bank to unilaterally and irrevocably write off amounts of both principal and interest without incurring an event of default.

Distributions start at 7½% per year. The rate will reset to Treasuries plus 301.1 basis points on May 29, 2029.

The bonds may be redeemed in whole, but not in part, at the issuer’s option at par plus unpaid dividends on the interest reset date. They may also be redeemed early at any time for taxation reasons, tax deduction reasons or regulatory reasons.

China Industrial Securities International, DBS Bank Ltd., Huajin Securities (International), Luso Bank Ltd., Bank of China (Hong Kong), Bank of China Macau Branch, Bocom International, CCB International, CEB International, Citic Securities, CMBC Capital, CNCB Capital, Credit Agricole CIB, Guolian Securities International, Guotai Junan International, Guoyuan Securities (Hong Kong), Haitong International, ICBC (Macau), Orient Securities (Hong Kong), SMBC Nikko, SPDB International, TF International and Bank of East Asia, Ltd. are the joint lead managers and joint bookrunners for the Regulation S offering, with China Industrial, DBS, Huajin and Luso also acting as joint global coordinators.

Proceeds will be treated as tier 2 capital and used to replenish the bank’s supplementary capital.

Listings for the bonds are expected on both the Hong Kong Exchange and the Chongwa (Macao) Exchange effective Nov. 30.

The bank is a full-service bank, which operates primarily in Macau.

Issuer:	Luso International Banking Ltd.
Amount:	$280 million
Issue:	Dated subordinated capital bonds
Maturity:	May 29, 2034
Bookrunners:	China Industrial Securities International, DBS Bank Ltd., Huajin Securities (International), Luso Bank Ltd., Bank of China (Hong Kong), Bank of China Macau Branch, Bocom International, CCB International, CEB International, Citic Securities, CMBC Capital, CNCB Capital, Credit Agricole CIB, Guolian Securities International, Guotai Junan International, Guoyuan Securities (Hong Kong), Haitong International, ICBC (Macau), Orient Securities (Hong Kong), SMBC Nikko, SPDB International, TF International and Bank of East Asia, Ltd.
Trustee:	Bank of New York Mellon, London Branch
Counsel to issuer:	Clifford Chance (England, Hong Kong)
Counsel to underwriters:	Linklaters (England, Hong Kong), MdME Lawyers (Macao), King & Wood Mallesons (China)
Coupon:	7½% starting rate; resets to Treasuries plus 301.1 bps on May 29, 2029
Price:	Par
Yield:	7½%
Call:	At par plus interest, in whole and not in part, on May 29, 2029; at any time for taxation reasons, tax deduction reasons or regulatory reasons at par plus interest
Trade date:	Nov. 24
Settlement date:	Nov. 29
Listing date:	Nov. 30
Distribution:	Regulation S
ISIN:	XS2720193981

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