UOB prices landmark €1 billion dual-tranche covered bond offering

UOB has priced a landmark €1 billion dual-tranche covered bond offering as the first executed by an Asian issuer under its US$15 billion Global Covered Bond Programme. This marks the first two-year euro covered bond issuance from an Asia-Pacific issuer since 2023, showcasing strong investor demand. The offering, which generated exceptionally strong investor interest, exceeded peak combined order books of €4.25 billion within four hours of launch, leading to a €3.9 billion final book and about four times oversubscription.

To optimize funding spreads, UOB tightened pricing, re-pricing the two-year tranche by 8 basis points and the five-year tranche by 6 basis points. Both tranches share an expected issue date of Sep 8 and are backed by Glacier Eighty, a portfolio of loans. The bonds are expected to receive Aaa and AAA ratings, respectively. The dual-tenor strategy attracted a diverse investor base, with bank treasuries dominating the two-year tranche (56%) and asset managers leading the five-year tranche (41%).