Asia’s First Euro-denominated Covered Bonds Issued in Singapore

UOB Singapore

Singapore’s United Overseas Bank has become the first bank in Asia to distribute euro-denominated fixed-rate covered bonds.

The debt instrument raised 500 million euros through global investors, according to a press release sent on Thursday . The covered bonds issuance is the first series under UOB’s $8 billion Global Covered Bond Programme.

UOB’s euro-denominated covered bonds are backed by a portfolio of quality mortgage loans linked to residential properties in Singapore.

They are expected to be rated ‘AAA’ by Standard & Poor’s Ratings Services and ‘Aaa’ by Moody’s Investors Service this week. The covered bonds provide investors, particularly those from Europe, an opportunity to diversify their portfolio with covered bonds issued out of Singapore. They have also enabled UOB to broaden its funding sources and to expand its investor base to Europe.

Confidence in Singapore

«Despite the current volatility and uncertainty in the financial markets, UOB’s covered bonds garnered strong investor interest, showing the confidence that global investors have in the sovereign standing of Singapore as well as the fundamentals of the country’s economy and housing market,» said Lee Wai Fai, Chief Financial Officer at UOB.

Among the investors taking up the issue are banks (36 percent), fund managers (31 percent), central banks (18 percent), insurance funds (10 percent) and others (5 percent).

To demonstrate UOB’s commitment to the development of the covered bonds market, the Bank is the first among global issuers to put in place the «Harmonised Transparency Template» – a new system introduced by the «Covered Bond Label Foundation» to allow investors to make better comparisons of cover assets across covered bond jurisdictions.

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