KUALA LUMPUR (Oct 20): United Overseas Bank (M) Bhd successfully priced a RM1 billion Basel III-compliant Tier 2 Subordinated Medium Term Notes this week, which marked it as the first locally incorporated foreign financial institution to enter the Malaysian bond market since 2020, said its joint lead manager HSBC Bank Malaysia Bhd.

In a statement by HSBC Bank on Thursday (Oct 20), the bank highlighted that it is the largest ringgit issuance for UOB Malaysia since 2015.

UOB Malaysia is rated AAA with a stable outlook by RAM, while the Tier 2 offering is rated AA1.

"The significant demand for this bond enabled UOB Malaysia to achieve its tightest spread ever from all issuances to date in the Malaysian ringgit market, reflecting both the strength of UOB's credit quality and effectiveness of a targeted deal execution strategy against challenging market conditions.

"The transaction marks the fifth consecutive UOB Malaysia local currency bond issuance mandate for HSBC, and is yet another example of the importance of capitalising on windows of opportunity amid volatile markets," said HSBC Malaysia's head of debt capital markets, global banking, Millie Yap.

Due to overwhelming demand, the transaction was upsized from the initial target size of RM500 million to RM1 billion.

The 10-year non-callable five-year paper was priced at 65 bps above five-year MGS with a yield-to-first call date of 4.91% per annum.