United Overseas Bank (UOB) (SGX:U11) has announced its plan to issue $850 million in perpetual capital securities, which will be part of its US$30 billion ($38.63 billion) global medium-term note program.
The securities will carry a fixed annual distribution rate of 3.00%, which is scheduled for a reset on January 21, 2033, and subsequently every seven years. The reset rate will be determined by the prevailing seven-year Singapore Overnight Rate Average Overnight Indexed Swap (Sora-OIS) plus an initial spread of 0.94%.
Distributions are to be paid semi-annually in arrears, though the bank retains the right to cancel these payments.
Designed to qualify as Additional Tier 1 (AT1) regulatory capital for the bank, the securities are redeemable on January 21, 2033, or on any distribution payment date thereafter. They may also be redeemed if specific redemption events occur.
The issuance is expected to receive a Baa1 rating from Moody’s Investors Service and a BBB+ rating from Fitch Ratings.
On January 14, shares of UOB closed at $36.51, marking an increase of 32 cents, or 0.88%.
