UOB to issue $102m yuan bond

UOB to issue $102m yuan bond

United Overseas Bank (UOB) will issue a 500 million yuan (S$102 million) bond on June 24 - its first offshore yuan bond, which will be settled and cleared in Singapore.

The bond, with a yield of 2.5 per cent per annum, will mature three years from the date of issue - on June 24, 2016.

Mr Terence Ong, UOB's head of global markets and investment management, said demand for yuan-denominated investment products is on the rise.

"(The issuance) also serves to strengthen Singapore's reputation as a financial centre for the development of offshore RMB (yuan) treasury, investment and capital market products and activities," he said.

The notes will be issued under the $10 billion, Euro Medium Term Note programme established by the bank in 2010.

They are expected to be rated Aa1 by Moody's Investor Service, AA- by Standard & Poor's Ratings Services and AA- by Fitch Ratings.

Last month, the Industrial and Commercial Bank of China began offering yuan-clearing services to financial institutions here, a move expected to boost Singapore's ambitions to become an offshore yuan trading hub.

Singapore is the first offshore yuan-clearing centre outside of China.

HSBC Singapore was the first bank here to issue a bond in the offshore yuan market - a two-year fixed rate bond offering a yield of 2.25 per cent per annum issued last month.

The bank plans to raise 500 million yuan from the issue to finance its expansion of yuan-based lending assets.

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