U11 : U11 0% has priced S$600 million of perpetual capital securities at a fixed coupon rate of 2.55 per cent per annum, the lowest for benchmark perpetual securities for banks in Singapore, said the bank in its announcement on Wednesday morning.

In its press statement on Wednesday, UOB said it is piloting the digital issuance of its latest offering by tapping Marketnode's digital asset issuance, depository and servicing platform. The digital bond is run in parallel with the conventional issuance process.

Marketnode is a joint venture between the Singapore Exchange and Temasek. It is an exchange-led digital asset venture focused on capital markets workflows through smart contracts, ledger and tokenisation technologies.

UOB's latest offering also marks the first public capital issuance to reference the Singapore Overnight Rate Average (Sora) Overnight Indexed Swap rate.

The perps are first callable in 2028 and will be issued under UOB's US$15 billion global medium-term note programme.

According to the bank, the deal was 1.7 times subscribed with a final orderbook of more than S$1 billion from a total of 73 accounts comprising both quality institutional accounts and private banking investors.

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Ninety-two per cent of the investors are based in Singapore, with the remaining 8 per cent being international offshore investors.

UOB expects its non-call seven-year additional Tier 1 capital securities to be rated Baa1, BBB- and BBB+ by Moody's Investors Service, S&P Global Ratings and Fitch Ratings, respectively.

Separately, Fitch has assigned UOB's proposed perps an expected rating of BBB+(EXP), which is four notches below its aa- viability rating for the bank. The aa- rating comprises two notches for loss severity and two notches for non-performance risk, in accordance with Fitch's Global Bank Rating Criteria.

The loss severity is "high" in light of the proposed securities' deep subordination, noted Fitch in an e-mailed commentary on Tuesday.

This means that in the event of any winding-up proceedings, holders of these securities and all other additional Tier 1 securities of UOB will rank ahead of claims of only UOB's ordinary shareholders. They will rank below the bank's senior creditors, including covered bondholders, depositors and holders of the bank's Tier 2 capital securities, in priority of claims.

"UOB is fully behind the development of Singapore's digital capital markets infrastructure and the smooth transition to a Sora-centred financial market. We are pleased to be the first financial institution to support Marketnode's exchange-led network in our dual role as a major Singapore dollar bond issuer and bond house," said UOB deputy chairman and chief executive officer Wee Ee Cheong.

"As more global issuers and investors come on board and participate in Singapore's digital capital markets, we will see further strengthening of Singapore's status as the region's financial hub," he added.

Credit Suisse, HSBC (Singapore) and Standard Chartered have been appointed joint lead managers and joint bookrunners for the deal, with UOB as the sole global coordinator.

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