UOB prices S$400m in 4.25% perpetual capital securities, first callable in 2027

UOB has priced S$400 million in 4.25 per cent perpetual capital securities, which will be first callable in 2027. The capital securities will be issued under the US$30 billion global medium-term note programme, UOB said in a bourse filing on Tuesday (Jun 28).

UOB expects the capital securities will qualify as Additional Tier 1 capital for the bank, under the requirements of the Monetary Authority of Singapore. It also expects the capital securities will be rated Baa1 by Moody’s Investors Service, BBB- by Standard & Poor’s Rating Services and BBB+ by Fitch Ratings. Holders will have a right to receive distributions semi-annually at a fixed rate of 4.25 per cent per annum, subject to a reset every 5 years from the first reset date at Oct 4, 2027.

Redemption of the perpetual capital securities will be at a rate equal to the then-prevailing 5-year Singapore Overnight Rate Average Overnight Indexed Swap (Sora OIS) and the initial spread of 1.47 per cent. UOB expects the capital securities will be issued on Jul 4, 2022.

UOB is the sole global coordinator and bookrunner for the issue. 

The last similar offering made by UOB was in June 2021 when the bank priced S$600 million of perpetual capital securities at a fixed coupon rate of 2.55 per cent per annum, which then marked the lowest for benchmark perpetual securities for banks in Singapore. The digital bond tapped on digital asset issuance, depository and servicing platform Marketnode, a joint venture between the Singapore Exchange and Temasek.

Shares of UOB closed up S$0.15 or 0.6 per cent at S$26.55 on Monday.