#Singapore #Bond Issuance #United Overseas Bank #USD market

UOB Prices US$2 Billion Multi-Tranche Bond Offering

On March 27, 2025, United Overseas Bank (UOB) announced the successful pricing of a substantial US$2 billion multi-tranche bond, marking a strategic re-entry into the US dollar-denominated bond market. This issuance, which consists of different bond types including a three-year Fixed-Rate Note (FXD), a three-year Floating-Rate Note (FRN), and a five-year FRN, was priced competitively, taking advantage of favorable market conditions.

Market Context

UOB's decision to launch this bond offering comes at a time when the market appears stable, free from major economic disruptions or holidays that could otherwise impact investor sentiment. This timing is particularly significant as it precedes the proposed tariffs by U.S. President Trump on April 2, 2025. By taking advantage of this window, UOB demonstrated agility in navigating market dynamics, focusing on the enhanced demand for front-end fixed and floating rates from reputable bank issuers.

Notable Features of the Offering

The bond offering was structured into three distinct tranches:

• - Three-Year Fixed-Rate Note (FXD), priced at Treasuries plus 40 basis points.
• - Three-Year Floating-Rate Note (FRN), priced at SOFR plus 58 basis points.
• - Five-Year Floating-Rate Note (FRN), priced at SOFR plus 65 basis points.

UOB's robust pricing reflects the bank's solid re-engagement with global USD bond investors, particularly targeting U.S.-based investors. According to Ms. Koh Chin Chin, Head of Group Treasury, Research and Customer Advocacy at UOB, this issuance not only illustrates the bank’s commitment to establishing competitive benchmarks across different formats and tenors but also highlights the depth of liquidity available in the USD market.

Demand and Distribution Statistics

The issuance received overwhelming support from global investors, significantly exceeding expectations in terms of demand across various segments. Key statistics from the final order book are as follows:

• - Three-Year FXD Tranche: Final order book exceeded US$1.7 billion, with bids coming from Asia (54%), the US (40%), and EMEA (6%). Demand breakdown includes:

- Banks/Financial Institutions: 43%
- Fund Managers: 24%
- Central Banks and Official Institutions: 24%
- Corporates: 6%
- Others: 3%

• - Three-Year FRN Tranche: Final order book surpassed US$1.3 billion, with a robust US interest at 59%, and distribution including:

- Banks/Financial Institutions: 37%
- Fund Managers: 42%
- Central Banks and Official Institutions: 19%
- Others: 2%

• - Five-Year FRN Tranche: Attracting a final order book over US$570 million, with 93% of interest from Asia, detailing:

- Banks/Financial Institutions: 61%
- Fund Managers: 11%
- Central Banks and Official Institutions: 27%
- Others: 1%

Conclusion

UOB’s successful pricing of this US$2 billion multi-tranche bond demonstrates not only the bank's resilience in adjusting to market conditions but also reflects a strong recovery strategy aimed at engaging a diverse pool of international investors. As UOB continues to adapt its strategies and offerings, this issuance serves as a testament to the bank’s commitment to excellence in global finance. With increasing pressures in the economic landscape, UOB's ability to secure such favorable terms will likely enhance their reputation among investors and further bolster confidence moving forward.