United Overseas Bank Group (UOB) today announced a US$8 billion global covered bond programme to augment its funding base.
The covered bonds issued under the programme will be backed by a selected portfolio of mortgage loans linked to properties in Singapore. They are expected to be rated AAA by Standard & Poor’s Ratings Services and Aaa by Moody’s Investors Service.
The strong rating of the covered bonds reflects the robust covered bond legal framework in Singapore, the financial strength of UOB and the quality of mortgage loans originated by UOB.
Mr Lee Wai Fai, Group Chief Financial Officer at UOB, said the global covered bond programme will ensure that the Bank maintains a solid funding base that can support its clients through business cycles.
“UOB turns 80 this year and central to the Bank’s stable growth over the last eight decades has been its disciplined funding strategy. Through our covered bonds programme, we can efficiently diversify our funding sources and broaden our investor base while offering investors another avenue to participate in the growth of the Bank,” Mr Lee said.
Through UOB’s global covered bond programme, the Bank plans to expand and to diversify its investor base in Europe where there is strong demand from fund managers, banks and insurance funds for high- quality secured debt investments.
Mr Pierre Rousseau, Head of Global Markets, Asia Pacific at BNP Paribas said: “As a leading global covered bonds house, we are pleased to work with UOB as a joint arranger and are confident that UOB’s covered bond programme will set a new benchmark in the capital market for other financial institutions in Singapore and Asia.”
Mr Pierre Veyres, Chief Executive Officer, BNP Paribas Singapore and Regional Head for South East Asia at BNP Paribas said: “BNP Paribas Singapore and UOB have enjoyed a strong and fruitful relationship over many years and this covered bond programme is a testament to that partnership. We are confident that the bond will be well received given our combined strength and expertise.”
The net proceeds from the covered bond programme will be used for UOB’s general business purposes.
 In-principle approval has been received from the Singapore Exchange Securities Trading Limited (SGX-ST) for the establishment of the Programme and application has been made for permission to deal in and quotation for any Covered Bonds which are agreed at the time of issue thereof to be so listed on the SGX-ST.