UOB prices Singapore’s first SONIA sterling covered bond

The final order book saw that most demands come from the UK and EMEA.

UOB has priced its £850m floating rate covered bonds due 2026, using the Sterling Overnight Interest Rate Average (SONIA) as its interest basis, the bank announced in a press release. 
 
The covered bonds have been priced with a coupon rate of the Compounded Daily SONIA plus 100 basis points (bps), with a reoffer yield of 29 bps above SONIA. 

This reportedly makes UOB the first bank in Singapore to price a SONIA bond. 

The final order book came in excess of £975m, from across 19 orders, UOB said.

BNP Paribas, Credit Suisse International and UOB were the joint lead managers of this transaction.

By geography, 75.8% of orders came from the UK, 22.8% from Europe, Middle East and Africa (EMEA), and the remaining 1.4% in Asia.

By investor type, almost half or 48.5% were secured from asset managers, 39.9% from banks, and 11.6% from central banks and official institutions. 

Lee Wai Fai, group chief financial officer of UOB, said that the bank is pleased to return to the Sterling market and to re-engage our investors with the inaugural SONIA covered bond issuance from Singapore.

“Since we launched the country’s first Sterling-denominated covered bond in 2018, there is now greater clarity and established market conventions in the SONIA market,” Lee said, adding that the success of their latest transaction clearly shows investors’ solid reception to Singapore covered bonds.

UOB expected the bonds to be rated Aaa by Moody’s and AAA by S&P Global Ratings.