Connecting Dots Across Asia's Tech and Urban Landscape
Connecting Dots Across Asia's Tech and Urban Landscape

UOB Collaborates With CapitaLand On Singapore’s First Dual Tranche SORA-SOFR Loan

United Overseas Bank Limited (UOB) and CapitaLand announced that they have entered into an agreement for a two-year S$200 million term loan. The dual tranche loan, which references both the Singapore Overnight Rate Average (SORA)[1] and the Secured Overnight Financing Rate (SOFR)[2], is the first of its kind in Singapore.

The bilateral loan facility between UOB and CapitaLand comes ahead of a global transition from Interbank Offer Rates, including the London Interbank Offer Rate (LIBOR)[3], to alternative risk-free rates (RFRs). As RFRs are overnight interest rate benchmarks based on actual transactions, they are more transparent and more reflective of market conditions. SORA and SOFR have been identified by the relevant regulatory and industry bodies as the alternative benchmark rates to replace the Swap Offer Rate (SOR) in Singapore and the US Dollar LIBOR respectively.

The interest rate on the loan’s two tranches will be based on the compounded averages of daily SORA and SOFR, both calculated in arrears, and with respective applicable margins[4]. The loan proceeds will be used for general corporate purposes.

Mr Leong Yung Chee, Head of Corporate Banking Singapore, UOB, said, “The dual tranche SORA-SOFR loan facility is yet another milestone that reflects the strength of UOB’s longstanding relationship with CapitaLand[5]. It is also a major step in driving the adoption of new benchmark rates for financial products in Singapore. We will continue to work closely with the regulators, industry partners and our clients for a smooth transition process.”

Mr Andrew Lim, Group Chief Financial Officer, CapitaLand Group, said, “With our first SORA-SOFR dual tranche structure, CapitaLand continues to proactively prepare for the global transition to alternative benchmark rates. As a globally diversified real estate company, CapitaLand’s early adoption of these new interest rate benchmarks across different currencies enables us to work with our key banking partners such as UOB, to ensure that the Group’s ongoing transition of our loan book to alternative benchmark rates proceeds smoothly.”

Through this collaboration, UOB and CapitaLand aim to enhance market confidence in adopting SORA, which will in turn help accelerate the transition from the use of SOR to SORA. This is in line with the Monetary Authority of Singapore’s initiatives to support the adoption of SORA as a key interest rate benchmark in Singapore and the development of vibrant and robust SORA markets[6].

In June 2020, CapitaLand was the first company in Singapore to obtain a SORA-based loan and continues to pave the way for greater market acceptance of SORA- and SOFR-based interest rate benchmarks.


[1] For more information on SORA, please refer to The Association of Banks in Singapore’s website:
[2] For more information on SOFR, please refer to the Federal Reserve Bank of New York’s website:
[3] The Financial Conduct Authority in the United Kingdom announced that it would not compel banks contributing to the calculation of LIBOR to continue doing so beyond 2021. This means that LIBOR may be discontinued and/or it may be declared as non-representative prior to actual cessation.
[4] The daily rates of SORA and SOFR will be compounded in arrears respectively over the observation period using a day-weight shift methodology, which commences five business days preceding the first day (inclusive) of the interest period to five business days preceding the last day (exclusive) of the interest period. Payable on an agreed date, the interest amount for each tranche in respect of an interest period – calculated based on the outstanding loan principal, the compounded-in-arrears SORA or SOFR, an applicable margin and the number of days in the interest period divided by 365 (for SORA) or 360 (for SOFR), will be determined after the end of the observation period and prior to the end of such interest period.
[5] In May 2020, UOB provided CapitaLand with a S$500 million sustainability-linked loan, which remains the largest sustainability-linked loan in Singapore’s real estate sector.
[6] For more information, please refer to the MAS’ news release:

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