UOB prices $930m Panda bond at 1.83%

Onshore accounts supplied 78% of participation whilst offshore investors contributed 22%.

United Overseas Bank (UOB) has priced a $930m (RMB5.0b) three-year Panda bond at a coupon of 1.83%.

The issuance drew demand from both onshore and offshore investors, with the deal 1.6 times oversubscribed, the bank said in a press release.

Onshore investors accounted for 78% of participation, whilst offshore investors made up 22%.

UOB said the deal matches the joint largest issue size for a three-year tenor among foreign bank issuers, in line with its 2024 transaction. 

The size is also between $190m (RMB1b) and $560m (RMB3b) larger than comparable three-year tranches issued by other foreign banks earlier this year.

The final coupon represents a spread of 22 basis points over the three-year China Development Bank benchmark bond yield, making it one of the lowest achieved by an international Panda bond issuer excluding Hong Kong banks.

This is UOB’s third Panda bond since its debut in 2019 and its sixth issuance in China’s interbank bond market, including deals by its China unit. The bank plans to apply for a listing of the bond on the Singapore Exchange, subject to regulatory approval.

UOB said the onshore renminbi market has remained stable despite geopolitical uncertainty, as issuance activity continues and yields stay low. 

Koh Chin Chin, head of group treasury, research and customer advocacy at UOB, said the bank continues to engage with China’s renminbi investor base and support the development of the Panda bond market.

($1.00 = RMB5.40)