United Overseas Bank (Malaysia) on July 29 announced the pricing of a 750 million ringgit (US$176.50 million) tier 2 subordinated medium term notes, which generated strong investor demand.
The 10-year non-call five notes pay a fixed coupon of 3% per annum, which was at the tight end of the price guidance. This is also the lowest coupon ever achieved to date for a ringgit-denominated Basel III-compliant subordinated tier 2 transaction.
The deal garnered a final order book of 1.5 billion ringgit from 25 high quality accounts – peaking at 1.9 billion ringgit – enabling UOB (Malaysia) to upsize the offering from the initial target of 600 million ringgit. By type of investors, asset managers accounted for 60% of the bonds, while insurance companies bought 22%, and banks and private banks 18%.
Encouraged by the market response, UOB (Malaysia) CEO Wong Kim Choong notes the successful transaction reflects the investors’ confidence in the bank’s strong credit profile and robust business fundamentals against the backdrop of a challenging business environment and the impact of the Covid-19 pandemic. “We will continue to deepen our presence and to sharpen our capabilities in support of our customers,” he says.
CIMB Investment Bank, HSBC Bank Malaysia and UOB (Malaysia) acted as the joint lead managers for the transaction.