UOB prices US$600m 3.75% notes due 2029

UOB's logo on the facade of its building in Shenton Way, on Jan 11, 2019.
UOB's 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 priced the issue of its US$600 million subordinated notes due 2029 and callable in 2024 under its US$15 billion global medium term note programme.

The notes, priced at 99.657 per cent of their principal amount, bear an interest rate of 3.75 per cent per annum payable in arrears semi-annually, the lender said in an exchange filing on Tuesday (April 9).

If the notes are not redeemed or purchased and cancelled on the first call date, the interest payable on the notes from the first call date to the maturity date shall be reset to a fixed rate equal to the then-prevailing five-year US Treasury rate plus the initial spread of 1.50 per cent.

The notes are intended as Tier 2 regulatory capital for the bank and are expected to be issued on April 15, 2019. The first call date of the notes is April 15, 2024, while the maturity date is April 15, 2029.

In the event of a loss absorption event, UOB said the notes may be written down, in whole or in part, with any accrued and unpaid interest possibly being cancelled in respect to each note.

UOB expects the notes to be rated A2 by Moody's Investors Service, BBB+ by Standard & Poor's Rating Services and A+ by Fitch Ratings.

An application will be made to the Singapore Exchange Securities Trading for the listing and quotation of these notes on the Singapore bourse, UOB added.

The joint lead managers for the notes are UOB, Citigroup Global Markets Singapore, Credit Suisse (Singapore), The Hongkong and Shanghai Banking Corporation and Standard Chartered Bank.