SINGAPORE,Oct. 22,2024 -- UOB has successfully priced an RMB 5.0 billion three-year bond at 2.3 per cent,marking the Bank's first Panda bond since 2019.
The offering garnered strong demand with a subscription ratio of 1.73 times from both onshore and offshore investors. The bond was well-received by both existing and new investors,with new investors accounting for over 20 per cent of allocations.
The transaction successfully achieved the largest issue size for a three-year tenor among foreign financial issuers. The final coupon of 2.3 per cent represents a spread of 46 basis points over the three-year China Development Bank benchmark bond yield.
UOB will apply for the bond to be listed on the Singapore Exchange (SGX),subject to regulatory approval. This will be the first time for a financial institution to list a Panda bond on SGX.
Ms Koh Chin Chin,Head of Group Treasury,Research and Customer Advocacy,UOB,said,"We have always been excited to participate in the growth of the Panda bond market. We were the first Singaporean Panda issuer in 2019 and riding on the back of the rapidly-growing capacity of this market,our latest issuance is also the largest from a foreign financial issuer with a three-year tenor."
Transaction highlights
As the first Singaporean issuer and only Singaporean bank in the Panda bond market,UOB's Panda Bond issuance showcases the Bank'slong-standing commitment to the capital markets in Mainland China. This is in line with the Chinese government's continued efforts to promote Renminbi internationalisation.
This bond issuance marks the fifth Chinese interbank bond offering by UOB – including issuances by UOB Group and UOB (China). The Bank first tapped the market with an onshore financial bond offering by UOB (China) in April 2018. UOB's continued and repeated presence in the Chinese bond markets laid the strong foundation for UOB to achieve a jumbo RMB 5 billion issuance size this time.
UOB's transaction reopens the Panda bond market for global financial institution issuers just weeks after substantial bond market swings tied to risk sentiment changes in China following the Golden Week holidays. This demonstrates UOB's strong access and unique credit proposition to both offshore and onshore investors.
UOB visited four cities across five days in mid-2024 as part of a non-deal marketing exercise,covering key investors in Beijing,Shanghai,Shenzhen and Hong Kong SAR.
Distribution statistics
Geography:
Onshore investors in China - 64%
Offshore investors - 36%
Investor type:
Banks – 80%
Securities firms - 12%
Wealth management companies and funds - 8%
Bank of China is the Lead Underwriter and Lead Bookrunner,while China Construction Bank,China Securities,China Zheshang Bank,CITIC Securities,Deutsche Bank (China),Fubon Bank (China),Industrial and Commercial Bank of China,Industrial Bank,Standard Chartered Bank (China) and Sumitomo Mitsui Banking Corporation (China) are Joint Lead Underwriters and Joint Bookrunners.