SINGAPORE (Mar 13): United Overseas Bank has issued the first Panda bond from Singapore, making it the second Southeast Asian financial institution to do so.

Panda bonds are Renminbi-denominated bonds issued by foreign companies.

UOB’s debut onshore RMB bond was priced at 3.49%, one of the lowest rates among all Panda bonds issued to date.

The three-year RMB2 billion ($404.2 million) offering garnered strong demand with a subscription rate of 2.7 times from asset managers and commercial bank investors across Asia.

Thirty-eight per cent was placed to China’s onshore investors and 62% to international offshore investors.

The issue enables the bank to diversify its investor base further by currency and geography, and play a role in promoting the development of China’s Panda bond market.

Wee Ee Cheong, Deputy Chairman and Group CEO, UOB, says, “Our debut Panda bond issuance marks another milestone in UOB’s longstanding commitment to supporting greater financial market connectivity in the region. In particular, our participation in China’s onshore debt market, one of the largest globally, enables us to grow our presence in China as the country continues to liberalise the RMB and its financial markets. Further, through this offering, we can diversify our funding sources and continue to tap the increased connectivity between China and Asean arising from the Belt and Road Initiative to serve our customers’ needs.”

The Panda bond issuance from UOB is the second offering from the group after United Overseas Bank (China)’s onshore financial bond issued in April 2018.

Both issuances are rated AAA by China Chengxin International Credit Rating Co with a stable outlook.

Bank of China acted as the lead underwriter and lead bookrunner, while China Securities Co and Standard Chartered Bank (China) acted as joint lead underwriters and joint bookrunners.

Shares in UOB closed 24 cents higher at $25.04 on Tuesday.

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