UOB prices GBP850M floating rate notes due 2026

UOB logoPhoto by Leslie Shaffer

UOB has priced 850 million British pound floating rate covered bonds due 2026, in what may be the first issuance in Singapore to price Sterling Overnight Interest Rate Average (SONIA) benchmark notes, the bank said in a filing to SGX early Wednesday.

The bonds priced with a coupon rate of compounded daily SONIA plus 100 basis points, with a re-offer yield of 29 basis points above SONIA, the filing said.

UOB said the deal met with strong momentum, with a final orderbook of more than 975 million British pounds from investors including bank treasuries, central banks and official institutions, and real money fund managers.

The issue price was at 103.52 percent of the principal amount, the filing said.

“We are pleased to return to the sterling market and to re-engage our investors with the inaugural SONIA covered bond issuance from Singapore. Since we launched the country’s first sterling-denominated covered bond in 2018, there is now greater clarity and established market conventions in the SONIA market,” Lee Wai Fai, group chief financial officer at UOB, said in the statement. “The success of our latest transaction has clearly shown investors’ solid reception to Singapore covered bonds and is testament to UOB’s strong brand and fundamentals.”

The notes are expected to be rated Aaa by Moody’s Investors Service and AAA by S&P Global Ratings, UOB said.

The covered bonds’ payments of interest and principal will be guaranteed by Glacier Eighty, secured by a portfolio of loans Glacier Eighty purchased from UOB and by other assets Glacier Eighty holds, the filing said.

The maturity date is expected to be the interest payment date falling on or nearest to 21 September 2026, the filing said.

The bonds will be issued under UOB’s US$8 billion global covered bond program, the filing said.

The joint lead managers for the deal were BNP Paribas, Credit Suisse International and UOB, the filing said.