Singapore lender UOB demonstrated continued strong investor appetite for perpetual capital securities as it priced an S$850 million ( US$659 million ) perpetual, non-call, seven-year additional tier 1 ( AT1 ) bond on January 14.

The Reg S transaction was priced at par with a 3% coupon, translating into a reset spread of 94bp over the seven-year Singapore Overnight Rate Average ( Sora ), the tightest reset spread in bank capital issuances in the Singapore dollar ( SGD ) bond market in recent years. This is the first Singapore dollar AT1 from a Singapore bank since January 2024 and it generated a strong anchor demand from institutional and private bank investors. The perpetual securities are intended to qualify as AT1 regulatory capital of the company. 

The issuance saw robust demand across 96 local and offshore fixed income accounts, almost double the usual number for SGD capital securities offerings from Singapore issuers. The size of this bond issuance is on par with UOB's last AT1 issuance in January 2023. Together, these two are the largest issuances from a Singapore bank post-pandemic. 

The bonds were oversubscribed more than 2.4 times, signalling a well-diversified investor base and a granular order book. Just two hours after the book opening, the demand reached S$1.56 billion by noon and exceeded S$2 billion at the book close. Institutional investors formed the bulk of the demand, reaching 50% of the final order book, the highest for a SGD AT1 since 2020. The deal also received strong support from offshore institutional investors, with participation at 26%.

Koh Chin Chin, head of group treasury, research and customer advocacy at UOB, says the strong demand for the bond highlights investor confidence in UOB, with the notable offshore institutional participation capturing the growing appetite for SGD instruments, alongside the continued support from Singapore-based accounts.

The proceeds will be used for refinancing and for general corporate purposes. UOB is the sole global coordinator for the transaction as well as a joint bookrunner and lead manager, along with Citi.

Last week, two issuers printed perpetual subordinated securities: Thai Oil priced a US$600 million non-call 5.25-year transaction, while CAS-HKT issued a US$675 million offering with a similar tenor.