UOB locks 3% rate in $850m AT1 capital grab

The bank raises $850m via perpetual debt, with payouts cancellable at its discretion.

United Overseas Bank Limited (UOB) has priced $850m of 3% perpetual capital securities, first callable in 2033, to be issued under its $38.6b (US$30b) ‘Global Medium Term Note Programme’.

The securities carry a fixed distribution rate of 3% per annum, subject to a reset on 21 January 2033, UOB said in an SGX announcement.

On that date, and every seven years thereafter, the distribution rate will be reset to the then-prevailing seven-year SORA-OIS plus an initial spread of 0.94%. Distributions are payable semi-annually in arrears and are non-cumulative.

Payments may be cancelled at the bank’s sole discretion or may not be payable if the bank has no obligation to do so under the terms of the securities. Any distributions not paid will not accumulate or compound.

The securities are intended to qualify as Additional Tier 1 regulatory capital for UOB.

UOB serves as the sole global coordinator for the transaction, with Citigroup Global Markets Singapore Pte. Ltd. as joint lead managers and joint bookrunners.

US$1 = $1.29

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