UOB, on Sept 15, has priced £850 million ($1.58 billion) worth of floating rate covered bonds under the US$8 billion ($10.74 billion) Global Covered Bond Programme.

The GBP-denominated bonds will use the compounded daily <a href="https://www.theedgesingapore.com/tags/sterling-overnight-interest-rate-average-sonia"  target="_blank">Sterling overnight interest rate average (SONIA)</a> as its interest basis, making UOB the first issuer in Singapore to do so.

The issuance follows UOB’s consent solicitation for the conversion of the interest basis for its £350 million floating rate covered bonds due 2023 from the Sterling LIBOR to Compounded Daily SONIA in July 2021.

<i><strong>See also: <a href="https://www.theedgesingapore.com/news/banking-finance/ocbc-bank-becomes-first-bank-asia-complete-transition-libor-sonia"  target="_blank">OCBC Bank becomes first bank in Asia to complete transition from LIBOR to SONIA</a></strong></i>

The issuance is also the largest-ever Sterling covered bond offering from an Asian issuer. It also represents a landmark trade in establishing a SONIA-linked pricing point for issuers in the region.

“We are pleased to return to the Sterling market and to re-engage our investors with the inaugural SONIA covered bond issuance from Singapore,” says UOB’s group chief financial officer Lee Wai Fai.

“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. 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,” he adds.

UOB’s covered bonds have been priced with a coupon rate of Compounded Daily SONIA plus 100 basis points, with a reoffer yield of 29 basis points above SONIA.

The transaction saw a final order book in excess of £975 million from a diversified investor base comprising bank treasuries, central banks and real money fund managers.

The bonds are expected to be rated Aaa by Moody’s and AAA by S&P Global Ratings.

Shares in UOB closed 26 cents higher or 1.02% up at $25.83 on Sept 14.

UOB prices Singapore's first SONIA sterling covered bond offering

DBS suspends coverage of Bukit Sembawang Estates; keeps 'buy'

CGS-CIMB downgrades GKE with lower target price of 10 cents

Investors should focus on equities in the current environment with more defensive bias: Julius Baer

Businesses in Singapore eager to hire international talent with the rise of remote work

Putting consumer safety at the forefront of every retailer's agenda

ShopBack leverages Forter to grow securely

UOB prices Singapore's first SONIA sterling covered bond offering

Related Stories

Highlights

China's shock Covid shift adds fuel to world-beating stock rally

Related Stories

UOB to issue $400 mil perpetual capital securities with 4.25% fixed distribution rate

UOB ups Singapore's 2022 NODX growth forecast to 5%; other analysts retain GDP, NODX estimates

CGS-CIMB remains 'overweight' on banking sector on anticipated margin expansion