UNITED Overseas Bank (UOB) has launched and priced S$750 million in non-cumulative, non-convertible perpetual capital securities, which will bear a fixed distribution rate of 4 per cent per annum.
The bonds, which will be issued in the denomination of S$250,000, are intended to qualify as additional Tier 1 capital under the Basel III framework adopted by the Monetary Authority of Singapore.
While they are perpetuals, the bonds may be redeemed at the option of UOB on May 18, 2021, the first call date, and every five years thereafter to a rate equal to the prevailing five-year SGD Swap Offer Rate plus the initial margin of 2.035 per cent. Distributions are payable semi-annually.
The issue was about 3.1 times subscribed, with an order book totalling S$2.3 billion. In terms of investor type, distribution was 35 per cent to insurance companies and pension funds, 12 per cent to fund managers, 50 per cent to private banks, and 3 per cent to public sector entities.
The bonds are expected to be issued on or around May 18, subject to the satisfaction of customary closing conditions. They are expected to be assigned an issue rating of "BBB" by Fitch Ratings and "A3" by Moody's Investors Service.
UOB plans to use the net proceeds from the issue for general corporate purposes.
UOB, Credit Suisse (Singapore), The Hongkong and Shanghai Banking Corporation and Standard Chartered Bank are the joint lead managers and bookrunners for the issue.