Standard Chartered Bank has raised a total of $3.9 billion through a dual-currency subordinated bond issue to enhance its capital base. The issue came a week after the bank said it would take a 19.99 per cent stake in a mainland banking start-up, Bohai Bank, in Tianjin. The 10-year lower tier two subordinated bonds, with call options after five years, comprised a $500 million Hong Kong dollar fixed-rate tranche, a $670 million Hong Kong dollar floating-rate tranche and a US$350 million US dollar tranche. It was also the first subordinated debt issue in Hong Kong dollars. 'We want to test the liquidity,' Standard Chartered Bank managing director and head of fixed income for North Asia John Lim said. 'There's strong investor interest in the Hong Kong dollar on hopes the local currency might appreciate,' he said, adding that the two local currency tranches were slightly oversubscribed. The Hong Kong dollar fixed-rate tranche, offering a coupon of 3.5 per cent semi-annually, was priced at 99.886 to yield 3.535 per cent, or 40 basis points over mid-swaps. The local currency floater was priced at par, yielding 37 basis points over three-month Hibor. The US dollar tranche also met with strong demand - with the book 1.5 times subscribed and the size raised from the US$300 million the bank had initially targeted, according to a source. The source added the tranche offered broad appeal, with about 26 per cent of the issue bought by Hong Kong investors, 17 per cent by Singaporeans, 14 per cent by Chinese and 39 per cent by European investors. The tranche was priced at 99.938 to yield 4.389 per cent, or a spread of 75 basis points over US treasuries.