UOB Taps Digital Platform for Bond Issuance
In this article (5)
The bank has priced S$600 million of perpetual capital securities at a fixed coupon rate of 2.55 percent – the lowest for benchmark perpetual securities for banks in Singapore.
UOB is piloting the digital issuance of its latest bond offering on exchange-operated digital asset issuance platform Marketnode, the bank said in an announcement on Wednesday.
The non-call seven-year additional Tier 1 (AT1) capital securities offering is the industry’s first public capital issuance to reference the Singapore Overnight Rate Average Overnight Indexed Swap (SORA-OIS) rate. The digital bond is run in parallel with the conventional issuance process.
UOB said the transaction saw a subscription rate of 1.7 times, supported by an extensive investor base comprising both quality institutional accounts and private banking investors
Marketnode is a joint venture between Singapore Exchange and Temasek. It uses distributed ledger technology to connect various parties – from issuers to investors – and to tokenize capital securities so that smart contracts can be created and conducted for greater efficiency.
UOB said it is fully behind the development of Singapore’s digital capital markets infrastructure and the smooth transition to a SORA-centred financial market.
As more global issuers and investors come on board and participate in Singapore’s digital capital markets, we will see further strengthening of Singapore’s status as the region’s financial hub, Wee Ee Cheong, UOB deputy chairman, and CEO, said
Questions & Answers
Q.What is the coupon rate for UOB's latest perpetual capital securities?
What is the coupon rate for UOB's latest perpetual capital securities?
The perpetual capital securities are priced at a fixed coupon rate of 2.55 percent. This is the lowest rate for benchmark perpetual securities among banks in Singapore.
Q.What is significant about the interest rate benchmark used for this capital issuance?
What is significant about the interest rate benchmark used for this capital issuance?
This offering is the industry's first public capital issuance to reference the Singapore Overnight Rate Average Overnight Indexed Swap (SORA-OIS) rate. This reflects the transition to a SORA-centred financial market.
Q.How does Marketnode facilitate the digital issuance of bonds?
How does Marketnode facilitate the digital issuance of bonds?
Marketnode uses distributed ledger technology to connect various parties, including issuers and investors. It tokenises capital securities to enable smart contracts, which increases efficiency in the issuance process.
Q.What was the subscription rate for UOB's latest bond offering?
What was the subscription rate for UOB's latest bond offering?
The transaction achieved a subscription rate of 1.7 times. This was supported by a diverse investor base, which included both quality institutional accounts and private banking investors.
Reader pulse
Is digital bond issuance the future?
20,132 votes so far