UOB prices A$1.5 billion dual tranche Senior Unsecured Bond

PRNewswire March 9, 2023

SINGAPORE, March 9, 2023 /PRNewswire/ –┬áUOB has priced a AUD1.5 billion dual tranche 3-year Senior Unsecured Bond (“Bond”) comprising AUD 750 million Floating rate (“FRN) tranche at 3m BBWS + 73 bps and AUD 750 million Fixed Rate (“FXD”) tranche on equivalent basis at 4.642%, to be issued under the Global Medium-Term Note (GMTN) Programme. It is the largest AUD bond on record from an Asia ex-Japan bank, and represents the tightest pricing YTD in AUD for any 3-year FI bond, including from major banks.

Ms Koh Chin Chin, Head of Group Treasury and Research, UOB, said, “This is our first international benchmark offering this year and we’re very pleased with the reception we were met with, not only from our core investor base, but also from new investors both domestically in Australia and globally. The AUD market not only offers us very valuable diversity, but volumes now are comparable to other international markets. Our commitment to accessing this market as one of our core sources of funding only continues to grow.”

Here are some of the deal highlights:

Transaction highlights

  • Largest AUD bond on record from an Asia ex-Japan bank
  • Largest 3-year bond orderbook for a non-major bank YTD (largest overall for an Asia ex Japan bank YTD)
  • Tightest pricing YTD in AUD for any 3-year FI bond
  • Priced with zero new issue concession to major bank secondaries

Well-timed to leverage strong market technicals

  • Transaction allowed UOB to take advantage of a turnaround in global market sentiment in 2023 and pent-up cash staying on the sideline that has pushed spreads to YTD lows
  • Navigated busy market with announcement immediately after the RBA’s rate decision on Tuesday, with demand staying despite the Fed’s hawkish tone overnight

Overwhelming reception with the largest 3-year AUD orderbook for a non-major YTD

  • Dual tranche FXD/FRN strategy allowed UOB to garner support from investors across both formats. In particular, UOB was able to leverage the higher yield environment that attracted domestic fund managers to the FXD tranche
  • Two-day execution to leverage the full support of global investor base with an overwhelming response from the start ÔÇô AUD1.27bn in indications of interest (IOIs) on the first day alone
  • Final orderbook reached AUD2.8bn – the largest achieved by a non-major bank in the 3-year space YTD

 Achieved impressive issuance size while maximising pricing tensions

  • Minimal orderbook attrition despite tightening by 5bps from of BBSW/ASW+78bps to price at 73bps. This was flat to the major bank curve, showing the strength of demand for UOB’s credit
  • Strong demand allowed UOB to maximise final size to AUD1.5bn, the largest size outside of major banks YTD and also largest AUD domestic print by an Asia ex-Japan bank on record
  • Final pricing of BBSW/ASW+73 was tighter than the most recent major bank print from Westpac, the tightest 3-year bank pricing in the domestic markets YTD

┬áFinal orderbook ÔÇô AUD 2.8 billion from 99 investors

By Investor Type

Percentage

Bank

53 %

Asset Managers/Fund Managers/Insurance

28 %

Official Institutions

10 %

Middle Markets (regional banks/brokerages)

5 %

Others

4 %

 

By Geography

Percentage

Asia

53 %

Australia

41 %

Europe, the Middle East and Africa (EMEA) &
the United States

6 %

 

 

SOURCE UOB

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