Singapore lender UOB on March 26 priced a multi-tranche bond offering totaling US$2 billion, taking advantage of recent constructive market environment and a stable issuance window. The issuance generated a strong investor demand and achieved tighter pricing from comparable financial institution group ( FIG ) transactions.

The Reg S/144A deal was comprised of a three-year fixed rate bond amounting to US$800 million, which was priced at a spread of 40 basis points ( bp ) over US treasuries – or 25bp tighter than the initial price guidance in the 65bp area. The second tranche was a three-year senior floating rate note ( FRN ) amounting to US$900 million, which was priced at 58bp over the secured overnight financing rate ( Sofr ), while the third tranche was a five-year senior FRN amounting to US$300 million, which was printed at a spread of 65bp over the Sofr, which was 25bp inside of the initial price guidance in the 90bp area.

At these levels, UOB recorded the tightest spreads for the three-year fixed rate bond and FRN among the US dollar FIG senior notes since early 2022 in Asia-Pacific, outside of China and Japan. It achieved zero new issue concession in both three-year fixed rate and three-year FRN tranches, and a negative 5bp new issue premium in the five-year FRN tranche. The bank offered fixed rate and FRN tranches to cater to both yield and spread buyers, with the three- and five-year tenors aimed at a larger group of target investors with different tenor preferences/requirements.

The bank executed the transaction with no key market-moving economic events or holidays and ahead of President Donald Trump’s proposed tariffs on April 2 on any nation with a major trade imbalance with the US. It also capitalized on the recent strong demand for front-end floating rate and fixed rate senior paper from high quality-bank issuers. This issuance further demonstrates UOB’s commitment to re-engage with global US dollar bond investors, particularly with US ones.

“The US dollar market continues to be one of our deepest liquidity sources,” says Kok Chin Chin, the bank’s head of group treasury, research and customer advocacy. “After a brief hiatus, we set out to re-engage the widest global investor community and establish new benchmarks across different formats and tenors. Notwithstanding the growing headwinds, it has been very heartening to see such a solid reception from our real money investors, allowing us to surpass our size expectations at very competitive funding levels.”

UOB also adopted an intra-day execution strategy to minimize overnight risks. The transaction attracted a total order book of US$3.57 billion, with the three-year fixed rate tranche accounting for US$1.7 billion, three-year FRN US$1.3 billion and the five-year FRN US$570 million

Proceeds from the bond offering will be used for general corporate purposes. ANZ, BNP Paribas, HSBC, Standard Chartered, UBS and UOB were the joint bookrunners and lead managers for the transaction, while Bank of China acted as a co-manager.