UOB Perpetuals

UOB Perpetuals: Yield on UOB’s perpetual bonds, which the lender says represent the first Basel III compliant additional Tier 1 capital raising by an Asian bank, falls 2 bps to 4.88% from level set at July 15 sale. OCBC Credit Research says the UOB perpetuals offer “decent yield pickup, not screaming buy” of 140 bps over its existing July 2022 bonds that are callable in 2017. The notes also offer an “okay” adjusted spread of abt 114 bps over DBS's 5.75% perpetual notes callable in 2018. Adds, the yields compensate for debt ranking below all senior creditors and Tier-2 capital holders, and loss-absorption risk. The UOB Tier-1 perpetual notes are callable after 2018; coupon to be adjusted based on 5Y swap + 3.195% Note: UOB raised $850m from the notes at par with 4.9% coupon. Total orders about $2b and private banks bought 74% of the debt.