UOB prices 1.5b euros in covered bonds due 2025 at 0.387%

UOB has priced 1.5 billion euros (S$2.3 billion) worth of fixed-rate covered bonds under the its US$8 billion global covered bond programme. The bonds will be issued at par on Mar 17.

The 3-year bonds carry a coupon rate of 0.387 per cent per annum, payable annually in arrear, UOB said in a bourse filing on Thursday (Mar 10).

The issuance, which UOB claims to be Singapore's largest euro covered bond ever, was oversubscribed with an order book approaching 1.9 billion euros, according to deal stats seen by The Business Times.

More than half (55 per cent) of the final allocation was taken by central banks, official institutions and real money fund managers. The remaining went to banks, insurance and pension funds.

"We capitalised on the anticipated strong demand for euro covered bonds, which are seen as a safe haven instrument, to print the largest transaction to-date from Singapore despite the challenging market backdrop," said UOB head of group central treasury unit Koh Chin Chin.

UOB expects the covered bonds to be rated Aaa by Moody's Investors Service and AAA by Standard & Poor's Rating Services.

UOB, BNP Paribas, HSBC Continental Europe, Société Générale and UBS AG London Branch have been appointed as lead managers for the covered bonds. Landesbank Hessen-Thüringen Girozentrale was appointed as the co-manager.