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Fullerton Healthcare launches S$100m SGD bond offer backed by ADB fund

FULLERTON Healthcare Corporation said on Thursday it has successfully launched its S$100 million bond offering.

The offering consists of two tranches, a S$50 million tranche due 2021 and a S$50 million tranche due 2023. Both tranches are being backed by Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank (ADB), and have been assigned an "AA" rating by S&P.

The five-year tranche is being priced at a coupon rate of 2.45 per cent, while the seven-year tranche is being priced at a coupon rate of 2.75 per cent. Both tranches were issued at an average premium of about 78 basis points over the prevailing Swap Offer Rate.

Fullerton Health is the first issuer in the healthcare sector that is tapping the SGD bond market with the support of CGIF's credit guarantee. CGIF has total capital contributions of US$700 million from Asean+3 countries (China, Japan and South Korea), as well as from ADB. The issue will be the fifth SGD-denominated bonds wrapped by CGIF.

Ramesh Rajentheran, chief financial officer of Fullerton Health, said the funds would be harnessed to strengthen the group's financial position and pare down existing short-term debt with various banks and to reduce its reliance on bank borrowings going forward.

"Corporate healthcare market has been on an uptrend especially in the Asia Pacific region and our Group is well-poised to ride on the surge," he said.

CIMB and OCBC have been mandated to lead manage the bond issuance.