United Overseas Bank (UOB) has successfully priced the first Panda bond from Singapore, which is also only the second such issued by a South-east Asian bank.

The onshore yuan bond was priced at 3.49 per cent, one of the lowest rates among all Panda bonds issued to date, UOB said in a regulatory filing yesterday.

The three-year, two billion yuan (S$404 million) offering garnered a subscription rate of 2.7 times from asset managers and commercial bank investors across Asia.

Investors in China accounted for 38 per cent while 62 per cent went to offshore investors.

UOB said the issue enabled it to diversify its investor base by currency and geography and also to promote the development of China’s foreign bond market.

UOB deputy chairman and group chief executive Wee Ee Cheong said: “Our participation in China’s onshore debt market… enables us to grow our presence in China as the country continues to liberalise the (yuan) and its financial markets.

“Further, through this offering, we can diversify our funding sources and continue to tap the increased connectivity between China and ASEAN arising from the Belt and Road Initiative to serve our customers’ needs.”

Monetary Authority of Singapore deputy managing director Jacqueline Loh said: “We congratulate UOB for being the first Singapore entity to successfully tap the onshore bond market in China.

“Such cross-border issuance’s would expand financing channels and strengthen capital markets connectivity between China and Singapore.”

UOB shares dipped by 14 cents to close at $24.90 yesterday.