United Overseas Bank (UOB) is this week set to issue the first Singaporean euro benchmark in over two years, in an intermediate maturity, and syndicate bankers said the rare supply is sure to pique investor interest, potentially offering a pick-up to other non-Eurozone issuance.

HSBC, Société Générale, UBS and UOB have the mandate for the new issue, which was announced today (Monday), with launch slated for the near future, subject to market conditions.

The last euro benchmark from Singapore was also from United Overseas Bank, a €500m (SGD767m) five year transaction in September 2018.

“UOB last hit the market in 2018,” said a lead banker, “so people obviously need to refresh their lines a little bit for this one.”

A syndicate banker away from the leads said he had understood Singaporean issuers to be liquid and pre-funded going into next year.

“It came as a quite a surprise,” he said, “but it’s OK to have a Singaporean back on stage – it’s been quite some time – so I think investors will like it.

“Ever since Singapore started playing in this market they’ve gone for fives and sevens in euros,” he added, “but the decision-making process will probably take at least this afternoon, if not most of tomorrow (Tuesday).”

Another banker away from the leads said the new issue will offer a good pick-up versus other non-Eurozone issuers, from jurisdictions such as Canada and the Nordics.

“I am sure there will be an audience for this,” he said.

The UOB mandate follows the Monetary Authority of Singapore (MAS) announcing on 15 October the raising of Singaporean banks’ covered bond encumbrance limit from 4% to 10%, paving the way for a potential doubling of issuance volumes from Singapore.

“It could be the case that this is the reason for the mandate,” added the banker, “but I do not know for sure.”

Last Tuesday, Moody’s said the MAS move is credit positive for Singapore, providing it leads to increased issuance volumes, as this would reduce refinancing risks.

A syndicate banker said one other issuer is considering issuance in the near future and could hit the market this week.

“They’re lining up things internally to maybe go or not go,” he said.

While the market remains open, he added, it could be argued on the margin that as November turns to December issuers will be better advised to wait until the new year as investors begin to close their books.

“If UOB is a poor trade, it could be something of a mood-killer,” he said, “but if it goes well, who knows if a project of more will come by the end of the week?”