UOB makes strong return to GBP covered bond market with GBP750m 3-year issuance

SINGAPORE, Sept. 6, 2024 /PRNewswire/ -- UOB has priced GBP750 million in three-year covered bond due 2027. The covered bond was priced on Thursday (5 Sep) at the Sterling Overnight Index Average (SONIA) Rate plus 53 basis points. This is the largest orderbook for UOB in GBP covered bonds.

UOB is the first non-UK bank to access the GBP covered bond market post summer, to take advantage of the strong demand for front-end covered bonds. The three-year covered bond appealed to investors in the current macro environment and saw robust investor demand from real money fund managers, insurance and bank treasuries.

Ms Koh Chin Chin, Head of Group Treasury, Research and Customer Advocacy, UOB, said, "We were glad to be back to engage the covered bond market, and heartened to see the continued strong reception towards UOB credit and the Singapore Covered Bond by global investors."

Salient points about this offering

• Strong outcome with a rare GBP covered bond, allowing the Bank to tighten pricing and upsize the transaction
• Achieved tight pricing, a testament of UOB's robust credit quality. Priced 2bps inside of pre-summer supply from the region, in contrast to recent market re-opening trends with this week's UK supply re-opening with spreads 3bps wider than pre-summer
• Tightest ever priced 3-year GBP SONIA covered bond out of Singapore and joint tightest 3-year GBP SONIA covered bond in 2024 YTD

Distribution Statistics

• Final orderbook >1bn from 20 investors, with UK ~81%, Asia ~18% and Others ~1%  
• Robust investor demand from Banks ~51%, Fund Managers ~31%, Central Banks/Official Institutions/Insurance ~11%, Others ~7%

source: UOB