Singapore’s UOB has returned to the Singapore market with a $850 million ($660 million) additional tier (AT1) bond. AT1 bonds are issued to boost banks’ capital to meet Basel III regulations.
The bond is the largest from a Singapore bank since January 2024 and at a tight SORA spread of 94 basis points. It is also the joint largest Singapore AT1 from a Singapore bank since UOB’s own S$850 million perpetual in January 2023.
Strong demand allowed the bank to anchor investors at 3%, equivalent to fair value. It was the lowest yield since UOB’s S$600 million 2.55% PerpNC7 from June 2021, priced during Covid.
Final orders were over S$2 billion, allowing UOB to upsize from its original S$500 million benchmark to S$850 million. There was participation from 96 investors, almost double the usual number for Singapore capital offerings from Singapore issuers, according to the bank.
The mix of investors included: asset managers, insurers and agencies at 50%, private banks and securities houses made up 44%, with banks and corporates at 4% and hedge funds at 2%.
Carolyn Tan, head of debt capital markets (DCM) at UOB, told FinanceAsia: “This is a vote of confidence in UOB and the Singapore market.”
The Singapore issuance was 74%, with many of UOB’s “loyal investors” participating, while the non-Singapore issuance was 26% across Asia and beyond.
UOB was the sole global coordinator for the transaction, with Citigroup Global Markets Singapore as joint lead managers and joint bookrunners.
Nitesh Dugar, managing director, Citi DCM, noted there was strong demand in the bonds from abroad as investors continue to look for diversification options away from the US dollar.
UOB recently returned to the Euro bond market with a €850 million ($988 million) offer in November.
