United Overseas Bank ( Malaysia ) on July 29 announced the pricing of a 750 million ringgit ( US$176.50 million ) tier 2 subordinated medium term notes, which generated strong investor demand.

The 10-year non-call five notes pay a fixed coupon of 3% per annum, which was at the tight end of the price guidance. This is also the lowest coupon ever achieved to date for a ringgit-denominated Basel III-compliant subordinated tier 2 transaction.

The deal garnered a final order book of 1.5 billion ringgit from 25 high quality accounts – peaking at 1.9 billion ringgit – enabling UOB ( Malaysia ) to upsize the offering from the initial target of 600 million ringgit. By type of investors, asset managers accounted for 60% of the bonds, while insurance companies bought 22%, and banks and private banks 18%.

Encouraged by the market response, UOB ( Malaysia ) CEO Wong Kim Choong notes the successful transaction reflects the investors’ confidence in the bank’s strong credit profile and robust business fundamentals against the backdrop of a challenging business environment and the impact of the Covid-19 pandemic. “We will continue to deepen our presence and to sharpen our capabilities in support of our customers,” he says.

CIMB Investment Bank, HSBC Bank Malaysia and UOB ( Malaysia ) acted as the joint lead managers for the transaction.