Bank’s dual tranche issuance received a resounding response from sustainability-focused investors
UOB has successfully priced the first sustainability bond1 offering from Singapore. The US dollar-denominated issuance (Notes) represents the first dual tranche senior (Senior Notes) and Tier 2 instrument (Subordinated Notes) in sustainability format globally from a bank issuer. It achieved a comprehensive investor reach and participation across Asia Pacific, Europe and the US. The Senior Notes and the Subordinated Notes have been priced at a fixed coupon rate of 1.25 per cent and 2.00 per cent per annum respectively.
In aggregate, UOB raised US$1.50 billion, with a final orderbook of US$2.75 billion. The debut sustainability format of the dual tranche issuance benefitted from the strong support from sustainability-focused investors2 , who contributed 60 per cent to the final orderbook. The deal is the Bank’s inaugural issuance under the UOB Sustainable Bond Framework launched in March 20213 . This framework is part of the Bank’s larger sustainability agenda that is embedded into its business strategy and integrated into its lending policy. The proceeds will be used to finance or to refinance eligible businesses and/or projects in areas such as green buildings and renewable energy, as well as eligible social assets. These include COVID-19-related temporary bridging loans extended to small businesses in Singapore to help them sustain employment and to tide over the challenges from the pandemic.
Mr Wee Ee Cheong, Deputy Chairman and Chief Executive Officer, UOB, said, “Our progressive sustainable financing solutions are integral to how we help businesses across the region advance responsibly. This structured approach is driven by our sustainable finance frameworks, which encourage the development of smart cities, green buildings and the circular economy4 , in alignment with ASEAN governments’ focus on addressing rapid urbanisation and increasing infrastructure demand. “Through our inaugural sustainability bond offering, we are also leveraging our extensive capital markets access to connect global investors with opportunities to channel their capital to support organisations and projects that can make a meaningful impact to the region’s development. In particular, the resounding response from sustainability-focused investors is an affirmation of our role as a catalyst and enabler in forging a sustainable future for all.”
The issue date of the Notes is expected to be 14 April 2021. The Senior Notes are expected to receive ratings of ‘Aa1’ from Moody’s Investors Service and ‘AA-’ from both S&P Global Ratings and Fitch Ratings, while the Subordinated Notes are expected to be rated ‘A2’ by Moody’s Investors Service, ‘BBB+’ by S&P Global Services and ‘A’ by Fitch Ratings. UOB’s sustainability bond offering will be issued under its US$15 billion Global Medium Term Note (GMTN) Programme. BNP Paribas, HSBC, Societe Generale and UOB are joint lead managers of this transaction, with Bank of China as co-manager. The UOB Sustainable Bond 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. Sustainalytics, an independent environmental, social and governance and corporate governance research, ratings and analytics firm, provided the Second-Party Opinion on the UOB Sustainable Bond Framework.
