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Temasek prices oversubscribed 12-year, 30-year euro bonds at 0.5% and 1.25%

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Singapore state investment firm Temasek Holdings on Thursday said its wholly-owned subsidiary Temasek Financial (I) Ltd (TFin-I) has priced its 12-year and 30-year guaranteed euro notes.

SINGAPORE state investment firm Temasek Holdings on Thursday said its wholly-owned subsidiary Temasek Financial (I) Ltd (TFin-I) has priced its 12-year and 30-year guaranteed euro notes.

The 500 million euro (S$750.1 million) bond due 2031 carries a coupon of 0.5 per cent, to be paid annually. It was priced at a spread of 40 basis points (bps) over the 12-year benchmark euro mid-swap rate. This 12-year note will be issued below par, at 98.742 per cent, to give a yield to maturity of 0.609 per cent per annum.

Meanwhile, the 500 million euro bond due 2049 will pay a 1.25 per cent coupon annually. This was priced at a spread of 80 bps over the 30-year benchmark euro mid-swap rate. The 30-year note will also be issued below par, at 98.348 per cent, giving a yield to maturity of 1.317 per cent per annum.

Leong Wai Leng, chief financial officer of Temasek, said on Thursday morning that the dual-tranche bond offering, launched on Wednesday, was oversubscribed and attracted “strong demand from high-quality investors globally”.

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A term sheet seen by The Business Times showed that the deal was allocated to 160 accounts and saw 3.5 billion euros worth of orders in total.

By geography, some 24 per cent of allocations for the 12-year bond were made to Asia, followed by 22 per cent to the UK and 13 per cent to Germany, according to the term sheet. For the 30-year bond, 36 per cent were allocated to Asia, while 23 per cent went to Germany and 12 per cent to the UK.

Fund managers subscribed to the bulk of both bonds, taking up around 60 per cent. As for insurance and pension funds, they were allocated 28 per cent of the 12-year bonds and 36 per cent of the 30-year bonds, the term sheet showed.

The offering is scheduled to close on Nov 20. The new bonds are expected to be listed on the Singapore Exchange on Nov 21.

“As public markets of our credit quality, our Temasek bonds have helped increase our funding flexibility and expand our stakeholder base,” Ms Leong said.

Net proceeds from the issuance of the euro bonds will go towards funding Temasek and its investment holding companies' ordinary course of business.

They were offered outside the US, only to non-US persons.

The joint lead managers and bookrunners were Barclays, BNP Paribas, Credit Suisse and HSBC, said Temasek on Thursday.

Temasek has been assigned an overall corporate credit rating of "Aaa" by Moody's Investors Service and "AAA" by S&P Global Ratings. The 12-year and 30-year euro bonds are likewise rated “Aaa” by Moody’s and “AAA” by S&P.

The bonds are unconditionally and irrevocably guaranteed by Temasek. They are the 17th and 18th bond issues under TFin-I’s US$20 billion guaranteed global medium-term note programme.

TFin-I last issued two euro bonds in March 2016. They comprise a 500 million euro, 12-year, 1.5 per cent note due in 2028, and a 600 million euro, six-year, 0.5 per cent note maturing in 2022.