UOB prices 1 billion in EUR-denominated dual-tranche covered bond

UOB prices 1 billion in EUR-denominated dual-tranche covered bond

SINGAPORE, Aug. 27, 2026 /PRNewswire/ -- UOB has priced a EUR1 billion dual-tranche covered bond transaction comprising EUR500 million 2-year fixed-rate covered bonds at EUR mid-swap (MS) plus 7 basis points (bps) and EUR500 million 5-year fixed-rate covered bonds at MS plus 24bps.

This marks UOB's first EUR covered bond issuance of 2026 and the first dual-tranche EUR covered bond offering by an Asian issuer. The transaction also included the first 2-year EUR covered bond issuance from an Asia-Pacific issuer since 2023. The transaction was met with exceptionally strong investor demand, with peak combined order books exceeding EUR4.25 billion within four hours of launch and closing at approximately EUR3.9 billion, representing more than approximately 4x oversubscription.

By offering both 2-year and 5-year tenors, UOB was able to capture demand from a broad range of investors, including bank treasuries, central banks, official institutions and asset managers, while achieving cost-effective funding and optimising maturity management for the Bank.

The strength and quality of investor demand enabled UOB to tighten pricing significantly from initial guidance, with the 2-year tranche repriced by 8 bps and the 5-year tranche by 6 bps. 

The 2-year tranche also priced approximately 5 bps inside comparable Singapore secondary market levels. The transaction achieved a weighted average maturity of 3.5 years, allowing UOB to secure attractive funding costs while locking in historically tight funding spreads.

Ms Koh Chin Chin, Head of Group Treasury, Research and Customer Advocacy, UOB, said, "The strong demand for our Singapore Covered Bonds reinforces Singapore's standing in global capital markets. Following the success of our recent GBP issuance, our latest EUR covered bond also attracted robust investor interest, reflecting confidence in UOB. The dual-tranche structure allowed us to cater to diverse investor preferences while delivering an efficient funding outcome."

Salient points about this offering

• First Asian issuer to execute a dual-tranche EUR covered bond transaction. 
• The 2-year tranche was deliberately positioned to capture investor preference for shorter maturities in the current market environment, attracting demand from bank treasuries, central banks and official institutions, while the 5-year tranche appealed to traditional real money investors. 
• Demand peaked at more than EUR4.25 billion, reflecting strong support from high-quality institutional investors.
• Further strengthened UOB's position in the European covered bond market and reinforced its diversified funding platform.
• New issue premium was estimated to be negative 1-2 bps for the 2Y tranche and 0bps for the 5Y based on recent comparable primary deals; with the 2Y, 5bps inside secondary levels of Singapore peers.

Distribution Statistics

• Final orderbook: Total ~3.9bn (2Y: 2.0bn; 5Y: 1.9bn)
• 2Y: Bank treasury: 56%; Asset managers: 20%; Central banks/ Official institutions: 12%; Others: 12%
• 5Y: Asset managers: 41%; Central banks/ Official institutions: 26%; Bank treasury: 23%; Others: 10%

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