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UBS sells S$700m of Tier 1 perps at 5.875%; deal draws S$1.6b of interest

UBS Group AG, through a funding vehicle, has priced S$700 million of perpetual subordinated contingent permanent write-down securities at an interest rate of 5.875 per cent, according to a term sheet.

The deal drew applications worth more than S$1.6 billion, according to statistics provided by the bookrunners. Private banks took up 72 per cent of the offering, with asset and fund managers taking a further 20 per cent. Investors in Asia accounted for 99 per cent of the take-up, with the remaining 1 per cent from Europe.

The perpetuals are issued by UBS Group Funding but are guaranteed by the Swiss bank. They are expected to be rated "BBB-" by Fitch Ratings, and will be considered Tier 1 Capital for UBS.

The securities may be called after five years. If they are not called, the interest rate will be reset on the first call date, and every five years thereafter, to the then-prevailing five-year swap offer rate plus the initial spread of 360.5 basis points.

sentifi.com

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The offering was made under Regulation S outside of the United States, and under the Securities and Futures Act in Singapore.

UBS is the global coordinator for the offering, with DBS Bank, Standard Chartered Bank and United Overseas Bank as joint bookrunners.