UOB issues Singapore's first Panda bond, in offer sized at 2b yuan

The UOB logo on the facade of its building in Shenton Way, on Jan 11, 2019.
The UOB logo on the facade of its building in Shenton Way, on Jan 11, 2019. ST PHOTO: KUA CHEE SIONG

SINGAPORE - United Overseas Bank (UOB) has successfully priced the first Panda bond from Singapore, which is also only the second issued from a South-east Asian financial institution.

The Panda bond - Renminbi(RMB)-denominated bond sold in China by a foreign issuer - was priced at 3.49 per cent, one of the lowest rates among all such bonds issued to date, UOB said in a regulatory filing on Wednesday (March 13).

The three-year, two billion yuan (S$404 million) offering garnered a subscription rate of 2.7 times from asset managers and commercial bank investors across Asia, with 38 per cent placed to China's onshore investors and 62 per cent to international offshore investors.

UOB said the issue enabled the bank to diversify its investor base by currency and geography, and also promote the development of China's foreign bond market.

Wee Ee Cheong, UOB deputy chairman and group chief executive officer, said, "In particular, our participation in China's onshore debt market, one of the largest globally, enables us to grow our presence in China as the country continues to liberalise the RMB and its financial markets. Further, through this offering, we can diversify our funding sources and continue to tap the increased connectivity between China and Asean arising from the Belt and Road Initiative to serve our customers' needs."

Jacqueline Loh, deputy managing director, Monetary Authority of Singapore, said: "We congratulate UOB for being the first Singapore entity to successfully tap the onshore bond market in China. Such cross-border issuances would expand financing channels and strengthen capital markets connectivity between China and Singapore."

Bank of China was lead underwriter and lead bookrunner, while China Securities and Standard Chartered Bank (China) were joint lead underwriters and joint bookrunners.

UOB shares ended trading on Tuesday up $0.24 at $25.04.