UOB Malaysia issues RM600m notes
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United Overseas Bank (Malaysia) Bhd (UOB Malaysia) has completed its first issuance of RM600 million Basel III-compliant Tier 2 subordinated medium-term notes at a fixed coupon rate of 4.8%.
The bank said in a statement that the issuance of the sub-notes was under its RM8 billion senior and subordinated medium term notes programme and are rated AA1 by RAM Rating Services Bhd.
Increased from an initial target of RM500 million, the issuance was 2.5 times subscribed with orders in excess of RM1.5 billion.
Its CEO Wong Kim Choong said the strong credit rating, tight pricing and the oversubscription reflects the continued confidence of the investment community in UOB Malaysia’s robust capital position and business fundamentals.
“Strong investor demand also saw the notes priced at the lower end of the initial price guidance range with a fixed coupon rate of 4.8%.
He said UOB Malaysia plans to use the net proceeds from the issuance for general business purposes.
The notes will be due in 2028 and callable after July 2023. UOB Malaysia and HSBC Bank Malaysia Bhd are the joint lead managers on this transaction.
Questions & Answers
Q.What is the total value of UOB Malaysia's medium-term notes programme?
What is the total value of UOB Malaysia's medium-term notes programme?
The issuance of these notes falls under UOB Malaysia's larger RM8 billion senior and subordinated medium-term notes programme. This programme provides the framework for such capital-raising activities, allowing the bank flexibility in its financing strategies.
Q.What was the level of investor interest in this specific notes issuance?
What was the level of investor interest in this specific notes issuance?
The issuance was significantly oversubscribed, attracting orders in excess of RM1.5 billion, which is 2.5 times the increased target of RM600 million. This high demand reflects strong investor confidence in UOB Malaysia.
Q.What is the purpose of raising these funds for UOB Malaysia?
What is the purpose of raising these funds for UOB Malaysia?
UOB Malaysia intends to use the net proceeds generated from this notes issuance for general business purposes. This supports the bank's operational activities and overall strategic objectives within its financial operations.
Q.Which other financial institutions were involved in managing this transaction?
Which other financial institutions were involved in managing this transaction?
UOB Malaysia acted as a joint lead manager for this transaction, alongside HSBC Bank Malaysia Bhd. Both institutions played a key role in orchestrating the issuance of these Basel III-compliant Tier 2 subordinated medium-term notes.