SINGAPORE (BUSINESS HOURS) – UOB has priced a double tranche of senior notes at 1.25 percent and Tier 2 subordinated notes at 2 percent per annum. The bank raised US $ 1.5 billion (S $ 2 billion), with a final order book of US $ 2.75 billion.
The US dollar-denominated issue is Singapore’s first sustainable bond offering and a bank’s first sustainable format senior and Tier 2 double-tranche instrument, UOB said in a press release Thursday (April 8).
Investors from Asia-Pacific, Europe and the United States participated in the oversubscribed issue. Investors focused on sustainable development contributed 60% to the final order book.
The sustainable bond offering will be issued as part of the bank’s US $ 15 billion global medium-term note program. The scheduled ticket issuance date is April 14.
The bank will use the proceeds to finance or refinance qualifying businesses and projects in areas such as green buildings and renewable energy, as well as qualifying social assets.
These social assets include temporary gateways linked to Covid-19 loans to small businesses in Singapore to help them maintain their jobs and overcome the challenges of the pandemic.
The deal is also the bank’s first issue under its sustainable bond framework launched in March this year. The framework is in line with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines of the International Capital Markets Association, as well as ASEAN Green Bond Standards, social bond standards and sustainability bond standards, said UOB.
UOB Vice President and General Manager Wee Ee Cheong said, “This structured approach is guided by our sustainable finance frameworks, which encourage the development of smart cities, green buildings and the circular economy, in line with the focus by ASEAN governments on tackling rapid urbanization and growing demand for infrastructure.
The bank expects the senior notes to receive ratings of Aa1 from Moody’s Investors Service and AA- from S&P Global Ratings and Fitch Ratings. Subordinated bonds are expected to be rated A2 by Moody’s, BBB + by S&P and A by Fitch.
BNP Paribas, HSBC, Société Générale and UOB are co-leaders of this transaction, with Bank of China as co-manager.
UOB shares closed at $ 26.01 on Wednesday, down seven cents or 0.3%.