Martin Lee @ Sg
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UOB Preference Shares Details

UOB yesterday announced the details of their preference shares offering. 10 million UOB preference shares will be opened to subsciption, with 2 million shares earmarked for the retail market.

UOB Preference Shares announcement
UOB Preference Shares FAQ
UOB Preference Shares Offer Information Statement

EAch share has an issue price of $100 and for the retail investors, the minimum subscription is 100 shares (or S$10,000). The shares will provide a fixed dividend of 5.05% p.a. payable semi-annually on 15 March and 15 September each year.

They may be redeemed by UOB on 15 September 2013, 15 September 2018, and thereafter on 15 March and 15 September each year.

The offering will open at 9am on 28 August 2008 and close at 12 noon on 12 September (subject to changes). The preference shares is expected to be listed on the SGX from 16 September 2008, tradable in board lots of 100 shares.

Subscription for the retail investors can be done via the ATMs of UOB, DBS (including POSB) and OCBC. If demand exceeds supply, balloting will be conducted.

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12 comments
FongFC says 8 years ago

I got some questions on this statement – “fixed dividend of 5.05% p.a. payable semi-annually on 15 Mar and 15 Sep each year”

(1) How is the 5.05% payout calculated ? Is it 5.05% of the issue price of $100 ? The exisiting traded price during the semi-annual payout ?

(2) Since there are 2 payouts in a year, each payout will be 2.525% ?

Reply
    lioninvestor says 8 years ago

    (1) Based on issue price.

    (2) Yes.

    Reply
lioninvestor says 10 years ago

Preference shares are ok as long as the company doesn’t go bankrupt.

Just that there isn’t really a maturity date for you to exit should you want to. You have to either sell it on the secondary market, or depend on the bank to redeem from you (at their wishes).

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Bessie Sim says 10 years ago

How about the OCBC preference shares which were issued recently by OCBC bank that retail investors can buy via the ATM? Is that CAPITAL PROTECTED? guaranteed?

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Johnson says 10 years ago

UOB preference shares, again is not capital protected or guarantee,you may lose part of your capitals.

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lioninvestor says 10 years ago

Hi Jace,

A CDP account is required to hold the shares.

http://www.cdp.com.sg

You can go down to their office or alternatively, open it via any of the brokerage firms in Singapore.

The atm steps can be found in Appendix G of the offer information statement.

http://www.martinlee.sg/uploads/uob-preference-shares-prospectus.pdf

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Jace says 10 years ago

Hi, how can we buy the preference shares under ATM offer ( open for public)?

We need to open any account with CDB first? and any guide line?

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lioninvestor says 10 years ago

Hi Marc,

A different class of share is usually used to represent different rights (voting, dividends, etc).

As to why UOB uses E instead of B, I’m not exactly sure. Perhaps they already have Class B, C and D out there.

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Marc says 10 years ago

Hi Lion Investor,

I noticed that the UOB preference shares are termed Class E shares. Can you enlighten me as to what this actually means?

Hope to hear from you soon. Thanks!

Marc

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lioninvestor says 10 years ago

Hi Alvin,

It’s under a one tier system so there is no tax at your end. The recent tranche by OCBC has a slightly different yield.

http://www.martinlee.sg/ocbc-to-raise-preference-shares-again/

Hi Glorious Citizen,

Thanks for your feedback.

The only chance the dividend is not paid is either
1) the bank does not pay dividend to its ordinary shareholders; or
2) the bank goes under.

Reply
Glorious Citizen says 10 years ago

There’s just too many such preference shares of late. I hope this won’t turn out to be another “sub prime crisis” where banks sell a product (“promising” high interest rate) to retail investors and they cannot realize the promised returns…

By the way, I enjoyed reading your blog! Very informational! Thanks!

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Alvin says 10 years ago

what are the differences between OCBC and UOB PS?

Is UOB’s PS tax exempted?

Reply
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