United Overseas Bank (UOB) has priced Singapore’s first sustainability bond offering from Singapore, raising US$1.5 billion ($2.01 billion) under its $15 billion Global Medium Term Note (GMTN) Programme.

The US dollar-denominated issuance is the first dual tranche senior (senior notes) and Tier 2 instrument (subordinated notes) in sustainability format globally from a bank issuer. It also represents the inaugural issuance under UOB’s Sustainable Bond Framework which launched in March.

The senior notes and the subordinated notes have been priced at a fixed coupon rate of 1.25% and 2% per annum respectively. 

The orderbook for the issuance totalled US$2.75 billion, with participation from investors across Asia Pacific, Europe and the US. Sustainability-focused investors contributed 60% to the final orderbook.

BNP Paribas, HSBC, Societe Generale and UOB are joint lead managers of this transaction, with Bank of China as co-manager.

Get the latest Singapore corporate news stories for FREE

SEE:CapitaLand Mall Trust secures first sustainability-linked loan of $200 mil from UOB

UOB states that proceeds from the issuance will be used to finance or to refinance eligible businesses and projects in areas such as green buildings and renewable energy.

In addition, “eligible social assets” may also be funded by the proceeds, which may include Covid-19-related bridging loans for small businesses in Singapore to help them sustain employment and to tide over the challenges from the pandemic.

Wee Ee Cheong, deputy chairman and CEO of UOB,  says that the bank’s sustainable financing solutions are integral to helping businesses across the region advance responsibly. 

“Through our inaugural sustainability bond offering, we are also leveraging our extensive capital markets access to connect global investors with opportunities to channel their capital to support organisations and projects that can make a meaningful impact to the region’s development,” he says.

The issue date of the notes is expected to be April 14. The senior notes are expected to receive ratings of ‘Aa1’ from Moody’s Investors Service and ‘AA-’ from both S&P Global Ratings and Fitch Ratings, while the Subordinated Notes are expected to be rated ‘A2’ by Moody’s Investors Service, ‘BBB+’ by S&P Global Services and ‘A’ by Fitch Ratings.

Shares in UOB closed flat at $26.01 on April 7.