SINGAPORE (THE BUSINESS TIMES) - UOB has priced a dual-tranche of senior notes at 1.25 per cent and Tier 2 subordinated notes at 2 per cent per annum. The bank raised US$1.5 billion (S$2 billion), with a final order book of US$2.75 billion.
The US dollar-denominated issuance is the first sustainability bond offering from Singapore and the first dual-tranche senior and Tier 2 instrument in sustainability format globally from a bank, UOB said in a press statement on Thursday (April 8).
Investors across the Asia-Pacific, Europe and the United States participated in the oversubscribed issuance. Sustainability-focused investors contributed 60 per cent to the final order book.
The sustainability bond offering will be issued under the bank's US$15 billion global medium-term note programme. The expected issue date of the notes is April 14.
The bank will use the proceeds to finance or refinance eligible businesses and projects in areas such as green buildings and renewable energy, as well as eligible social assets.
These social assets include Covid-19-related temporary bridging loans extended to small businesses in Singapore to help them sustain employment and tide over challenges from the pandemic.
The deal is also the bank's inaugural issuance under its sustainable bond framework launched in March this year. The framework is in line with the International Capital Market Association's Green Bond Principles, Social Bond Principles and the Sustainability Bond Guidelines, as well as the Asean Green Bond Standards, Social Bond Standards and Sustainability Bond Standards, UOB said.
UOB deputy chairman and chief executive Wee Ee Cheong said: "This structured approach is driven by our sustainable finance frameworks, which encourage the development of smart cities, green buildings and the circular economy, in alignment with Asean governments' focus on addressing rapid urbanisation and increasing infrastructure demand."
The bank expects the senior notes to receive Aa1 ratings from Moody's Investors Service and AA- from both S&P Global Ratings and Fitch Ratings. The subordinated notes are expected to be rated A2 by Moody's, BBB+ by S&P and A by Fitch.
BNP Paribas, HSBC, Societe Generale and UOB are joint lead managers of this transaction, with Bank of China as co-manager.
UOB shares closed at $26.01 on Wednesday, down seven cents or 0.3 per cent.