Earlier this week on October 21, United Overseas Bank (UOB) issued its second onshore Panda bond. At Rmb5 billion ($700 million) it was priced at a mid-range of 2.3%.
This was within the initial price range of 2.05% and 2.65% and was 46 basis points above the thre three year China Development Bank (CBF) benchmark bond yield.
FinanceAsia understands from a Hong Kong-based senior banking source close to the deal that the plan is to list the bond on the Singapore Exchange (SGX), subject to regulatory approval. FA also understands that UOB, which issued its first onshore panda bond in 2019, is also the only Sinagaporean bank operating in the panda bond market.
According to the source, in order to attract investors, a “non-deal marketing exercise” was conducted in Beijing, Shanghai, Shenzhen and Hong Kong, in the middle of 2024 during the summer.
64% of the investors in panda bond are from mainland China, while 36% of them are iinvestors from offshore. In terms of the types of investors, banks had an 80% attribution, securities funds 12% and wealth management funds 8%; out of all the investors, 20% of the investors are new investors, FA understands.
UOB mandated Bank of China as lead bookrunner and lead underwriter on the deal.
The joint bookrunners and joint lead underwriters on the issurance were: China Construction Bank; China Securities; China Zheshang Bank; CITIC Securities; Deutsche Bank (China); Fubon Bank (China); Industrial and Commercial Bank of China (ICBC); Industrial Bank; Standard Chartered Bank (China); and Sumitomo Mitsui Banking Corporation (China).
Panda bonds have been becoming more popular in recent years, and earlier this year the Shangri-La hotel group issued the first Panda bond for a Hong Kong-listed hospitality group.
