UOL Group Announces New SGD 7-Year Senior Notes at an FPG of 3.20%

• UOL Group Limited (UOL), through its financing vehicle UOL Treasury Services, intends to issue new SGD 7-year Senior Notes at a final price guidance (FPG) of 3.20%. Settlement is expected on 14 October 2026, with maturity on 14 October 2033. Both the guarantor and the notes are unrated. Net proceeds will be used for general corporate purposes, including refinancing of existing borrowings and financing of working capital and capital expenditure.
• As of 30 June 2026, the Group had total assets of S$23 billion, with a presence in 13 countries. Its business spans property development, property investments and hospitality. Through Pan Pacific Hotels Group, it owns and/or manages 49 hotels with over 14,000 rooms, while its listed subsidiary Singapore Land Group holds prime commercial assets and hotels in Singapore, Australia, China and the United Kingdom.
• For 1H2026, UOL reported revenue of S$1.4 billion, down 7.4% YoY. By segment, property development revenue fell 14.1% YoY to S$628.8 million, while property investments revenue rose 4.3% YoY to S$316.7 million and hotel operations revenue was largely flat at S$373.2 million. The lower property development revenue came as the Group entered into more development projects through joint ventures, such as PARKTOWN Residence and Skye at Holland, whose earnings are booked as share of profit rather than revenue.
• Operating PATMI, which excludes fair value and other gains, rose 16.1% YoY to S$239.8 million, driven by higher operating profits from property development and property investments. The Group also recorded fair value gains of S$44.4 million on its investment properties, against a S$9.9 million loss a year ago, driven mainly by valuation gains from The Clifford at Raffles Place, Singapore Land Tower, 110 High Holborn in the United Kingdom and 388 George Street in Australia. Including these, total PATMI rose 38.7% YoY to S$289.8 million.
• As of 30 June 2026, UOL held S$1.1 billion in cash and bank balances against total external borrowings of approximately S$5.3 billion, for net external borrowings of S$4.2 billion. About a fifth of borrowings was secured, with the bulk unsecured, and about 66% of debt was on fixed rates. The debt maturity profile is relatively short, with an average debt maturity of 2.0 years and roughly 68% of debt falling due between 2026 and 2028, which the new 7-year notes should help to lengthen. Liquidity is supported by S$2.8 billion in unutilised credit facilities and S$1.7 billion of financial assets, mainly quoted equity stakes.
• Net gearing stood at 0.26x as of 30 June 2026, up from 0.20x at end-2025, on higher borrowings to fund the acquisition of a 20% interest in Novena Square, banking halls at Novena Square and the former Faber House, as well as land purchases at Dorset Road and Hougang Central. The Dorset Road purchase also turned operating cash flow to a S$79.3 million outflow, from a S$355.9 million inflow a year ago. Average cost of debt eased to 3.2% from 3.3% in 1H2025, and finance expenses fell 10.6% YoY to S$81.1 million. Interest cover held steady at 8x, supported by higher earnings and reduced finance costs. NAV per share stood at S$14.20, up from S$13.92 at end-2025.
• Overall, we view UOL's credit profile as solid, underpinned by its diversified portfolio across property development, investment properties and hospitality.  Its balance sheet is also healthy, with low net gearing of 0.26x and comfortable interest cover of 8x. However, key risks are its relatively short debt maturity profile, and a heavier development and redevelopment pipeline.
• Against the SGS 7-year benchmark, the 3.20% FPG offers a pickup of approximately 86 bps over the risk-free curve.
• Against peers, the closest comparable by business mix is OUE Limited, which like UOL is an unrated property group with commercial, hospitality and development interests. The 3.20% FPG is 23 bps below the OUESP 3.250% 18May2033, which yields 3.43%, despite the new issue being about 0.4 years longer in tenor. In spread terms, the UOL notes offer about 86 bps over government bonds against 111 bps for the OUE notes. We think this tighter pricing is justified by UOL's larger scale, low net gearing of 0.26x and interest cover of 8x. The FPG is also 12 bps below the OUECT 2.750% 08Oct2032 from OUE REIT, which is rated BBB- by S&P and yields 3.32%. Compared to the higher-rated AREIT 3.730% 29May2034, which has an A3 rating from Moody’s and yields 3.04%, the FPG provides a pickup of 16 bps for a slightly shorter tenor.
• Overall, we see the 3.20% FPG as fairly priced. It sits between the A3-rated AREIT notes and the OUE names, which is where we would expect an unrated but financially strong issuer like UOL to price. Investors are not getting a pickup over the OUE and OUE REIT notes but are taking on a stronger balance sheet in exchange. As this is the final price guidance, the issue yield is not expected to tighten further.

Table 1: Peer Comparison