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UOB to issue $400 mil perpetual capital securities with 4.25% fixed distribution rate

Felicia Tan
·1-min read

The perpetual capital securities are intended to qualify as Additional Tier 1 regulatory capital for the bank.

United Overseas Bank (UOB) says it intends to issue $400 million worth of perpetual capital securities that will be first callable in 2027.

The SGD-denominated perpetual capital securities will be drawn down under the US$30 billion ($41.57 billion) global medium-term note programme.

The perpetual capital securities will bear a fixed distribution rate of 4.25% per annum, subject to a reset on Oct 5, 2027, and then every five years thereafter to a rate equal to the then-prevailing five-year Singapore Overnight Rate Average Overnight Indexed Swap (SORA-OIS) plus the initial spread of 1.47%.

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Distributions are payable semi-annually in arrear unless cancelled by UOB.

The perpetual capital securities are perpetual securities but may be redeemed at the option of UOB on the first reset date in October 2027 or any distribution payment date thereafter. They are expected to be rated Baa1 by Moody’s, BBB- by Standard & Poor’s and BBB+ by Fitch Ratings.

They are intended to qualify as Additional Tier 1 regulatory capital for the bank.

The perpetual capital securities are expected to be issued on July 4.

Shares in UOB closed 15 cents higher or 0.57% up at $26.55 on June 27.

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