United Overseas Bank's UOB Sydney Branch priced an A$2 billion three-year senior floating-rate bond on Feb 21 at 0.65% above the three-month Bank Bill Swap Rate (BBSW). The pricing represents the tightest spread achieved by any Asian bank for an issuance of above A$1 billion.
Koh Chin Chin, head of group treasury, research and customer advocacy, UOB, said, "Having accessed the market for over a decade, we have witnessed the significant growth in Australian dollar primary issuances, with the size, granularity and diversity in the appetite we saw in our transaction today a true reflection of how much development there has been. We are particularly pleased to have been able to achieve the volume today while at the same time, with the support of both our domestic and international investors, a very balanced distribution."
The Australian bond market has seen a record start to the year, with A$69 billion being issued so far in 2025, up 28 per cent y-o-y. The market has been driven by robust investor liquidity that has consistently tightened spreads.
Following the FY2024 financial results announcement on Feb 19, UOB adopted a two-day execution process to return to the Australian market. The final order book of A$4.4 billion represented a subscription ratio of 2.2 times.
Australian domestic investors accounted for 57% of the take-up rate with Asia at 37% and Americas/Europe/Middle East/Africa with 6%. Banks were allocated 53%; asset and fund managers 31%; insurance companies and official institutions 12%; middle market institutions 3%; and private banks, hedge funds and others just 1%.
The notes are expected to be issued on Feb 28. The joint lead managers are Australia and New Zealand Banking Group, Bank of China, Commonwealth Bank of Australia, UBS, UOB and Westpac Banking Corporation.
