UOB to issue US$2.1b worth of notes under US$30b global MTN programme

UOB on Friday (Apr 1) announced it intends to issue 3 series of notes amounting to US$2.1 billion under its US$30 billion global medium term note (MTN) programme, each to be issued at 100 per cent of their principal amounts on Apr 7, 2022.

The bank has priced the offering of US$750 million 3-year fixed rate senior notes due 2025 (Series 057) at 3.059 per cent, payable semi-annually in arrears.

The coupon rate of its US$350 million 3-year senior floating rate notes due 2025 (Series 058) notes bear a Compounded Index Secured Overnight Financing Rate (SOFR) plus 0.7 per cent per annum, payable quarterly in arrears.

Both the Series 057 and 058 notes are due to mature on Apr 7, 2025. They are expected to be rated "Aa1" by Moody's Investors Service and "AA-" by S&P Global Ratings and Fitch Ratings.

Meanwhile, US$1 billion longer-dated subordinated notes due 2032 (Series 059) have been priced at 3.863 per cent, payable semi-annually in arrears.

If they are not redeemed or purchased and cancelled on the first call date on Oct 7, 2027, the maturity date on Oct 7, 2032 shall be reset to a fixed rate equal to the then-prevailing 5-year US Treasury Rate plus the Reset Spread of 1.455 per cent.

The 10.5-year non-call 5.5-year Series 059 notes are expected to be rated "A2" by Moody's Investors Service; "BBB+" by S&P Global Ratings; and "A" by Fitch Ratings.

They are also intended to qualify as Tier 2 regulatory capital of UOB.

In the event of a loss absorption event, UOB said the Series 059 notes may be written down - in whole or in part - with any accrued and unpaid interest possibly being cancelled in respect to each note.

An application will be made to the Singapore Exchange Securities Trading for the listing and quotation of the 3 series of notes on the Singapore bourse.

BNP Paribas, Credit Suisse, HSBC, Standard Chartered, UBS and UOB have been appointed as the joint lead managers for the notes.

In a separate emailed statement on Friday, UOB said the deal represents the largest combined transaction issued by a Singapore bank in the US dollar market since 2008.

It is also the largest SOFR floating rate note from Singapore with the transaction activating a "very diverse and high quality global investor base".

According to the bank, its orderbook was very granular with more than 285 line items, and the investors well distributed across regions.

The senior tranche saw a strong distribution into real money fund manager and official institution anchors, while the Tier 2 tranche saw strong distribution into real money fund manager and insurance investors, it added.

Overall, UOB said its initial price guidance for its senior notes was T+90 basis points (bps) area and the Tier 2 initial price guidance was T+185 bps area.

This drove the momentum in the orderbook, with books reported at over US$1.5 billion before noon and more than US$4.5 billion at the Europe open, according to UOB.

Pricing of the senior notes represented around 9 bps of new issue premium. The Tier 2 notes pricing was at a new issue premium of around 5 bps, which UOB said was a "particularly compelling result considering broader comparable region trading levels".

"Amid a challenging backdrop of interest rates volatility and geopolitical tensions, we are heartened to receive an overwhelmingly positive reception of our US dollar senior and Tier 2 offerings from our investors globally. This reflects their confidence in UOB's strong business fundamentals," commented Koh Chin Chin, head of UOB's group central treasury unit.

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