UOB, on March 10, announced that it intends to issue EUR1.5 billion ($2.24 billion) worth of covered bonds due 2025.
The bonds, which carry a coupon of 0.387% per annum, will be issued as the 11th series under the US$8 billion ($10.89 billion) global covered bond programme.
According to UOB, this is the first issuance of a Singapore covered bond in 2022. The EUR1.5 billion transaction also makes this the largest Singapore EUR covered bond ever.
The bank adds that the bonds have been oversubscribed despite the challenging geopolitical market conditions and competing primary supply.
“[The bond’s] defensive and rare three-year tenor appealed to investors in the current climate and received very robust investor support across central banks / official institutions, real money fund managers and bank treasuries,” says the bank via a March 9 statement.
Of the final allocation, some 55% comprised “very high quality” orders from central banks, official institutions and real money fund managers.
See also: Singapore Savings Bond 10-year average return hits 3.33%, highest since November 2023
The remaining went to banks, insurance and pension funds.
The final order was approaching EUR1.9 billion from 56 investors.
Sean Henderson, HSBC’s co-head of debt capital markets in the APAC region says: “UOB’s ability to print EUR1.5bn, Singapore’s largest-ever EUR covered bond, amid challenging markets and competing primary supply is testament to the strength of UOB’s credit quality, their ability to move swiftly and selecting a market and tenor that is aligned with strong investor demand given the current climate.”
See also: 1H2024 outlook for Singapore credit: Bye or buy?
Shares in UOB closed 65 cents higher or 2.22% up at $29.96 on March 10.
Photo: Bloomberg
