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UOB sells covered bonds in dual currencies, a first in Asia

Thursday, February 23, 2017 - 18:40

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UNITED Overseas Bank has sold its second covered bonds comprising two tranches - a US$500 million 2.125 per cent and a 500 million euro (S$745.8 million) 0.125 per cent.

UNITED Overseas Bank has sold its second covered bonds comprising two tranches - a US$500 million 2.125 per cent and a 500 million euro (S$745.8 million) 0.125 per cent.

The sale was Asia's first dual currency covered bonds issue.

The covered bonds are issued under UOB's US$8 billion covered bonds programme backed by a selected portfolio of mortgage loans linked to properties in Singapore, the bank said on Thursday.

The USD/EUR covered bond offerings is part of UOB's wholesale funding initiative, aimed to expand and diversify its investor base, said a bank spokeswoman.

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The USD tranche matures in 2020 and received orders over US$900 million. By allocation, banks got 55 per cent of the issue, central banks and agencies 30 per cent, with funds and others the remaining 15 per cent. The geographic mix was Asia (41 per cent) and Europe (59 per cent).

The euro tranche which matures in 2022 had orders over one billion euros. The allocation was funds (44 per cent), banks (26 per cent), central banks/agencies (14 per cent) and pensions and others (16 per cent). European investors accounted for 93 per cent and Asia 7 per cent.

UOB's first covered bond, a 500 million euro 0.25 per cent due 2021 issue was sold in February 2016.

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