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UOB Prices €850 Million Secured Bonds

On November 27, 2025, United Overseas Bank (UOB) announced the successful pricing of €850 million in secured bonds set to mature in 2030. These bonds come with an enticing annual coupon rate of 2.718%. The issuance received strong interest from investors, showcasing robust demand across various sectors including asset management firms, banks, central banks, and official institutions.

This issuance not only marks a significant milestone as the first covered euro bond from a Singapore bank in over two years but also highlights UOB’s strategic positioning to expand its pricing curve. Importantly, these bonds recorded oversubscription exceeding €1.2 billion, indicating a favorable reception in the financial markets. The bonds also represent the most competitive pricing for euro-denominated bonds with a five-year maturity from a non-EU issuer since September 2022.

Koh Chin Chin, UOB’s Group Treasurer, expressed satisfaction with the market's response, stating, “We are pleased to return to the euro covered bond market and are thankful for the ongoing support from investors, which has permitted us to expand the curve for Singapore at the most competitive 5-year tone for non-EU issuers in recent years.” This sentiment underscores an important return for UOB into the euro bond market, which has seen fluctuations and varying demand patterns in the past.

Key Highlights of the Offering

1. First covered euro bond with a five-year maturity issued by a Singapore bank since October 2021.
2. The most competitive five-year euro covered bond pricing from a non-EU issuer since September 2022.

Distribution Insights

The final order book topped €1.2 billion, comprising allocations predominantly from 36 accounts. Specifically, asset managers accounted for approximately 40% of the demand, followed by banks at 29%, and central banks/official institutions at around 28%. Other participants included insurance firms and pension funds and minor allocations to financial entities.

Geographical distribution was robust, with major orders coming from Switzerland (28%), Germany (26%), the UK (19%), Nordic countries (14%), and the Benelux region (12%), along with other international stakeholders.

In terms of pricing strategy, UOB managed to adjust the Singapore price curve by 1 basis point, culminating at mid-swap (MS) plus 30 basis points, which is 1 basis point below fair value. The issuer also effectively managed to tighten the 3s5s curve—an indication of yield spread between the three-year and five-year mid-swap rates—down to 7 basis points compared to the commonly observed 10 basis points for EUR-covered bonds.

The competitive pricing achieved by UOB in this issuance reflects their efforts to navigate market dynamics effectively, particularly in the EUR covered bond space, outpacing traditional adjustments in yield differentials. This underscores a successful strategy that resonates well with global investors, further establishing UOB as a strong international player in bond markets.

With this issuance, UOB not only reiterates its commitment to strengthening its market presence but also displays a robust ability to cater to investor needs in evolving economic conditions. The appetite for these secured bonds demonstrates confidence in UOB's financial stability and growth prospects in the international arena.