Nexus International School to sell S$150m worth of bonds for new campus

PRIVATE education provider Nexus International School (Singapore) is looking to issue an amortising bond guaranteed by Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank, The Business Times (BT) understands.

This standalone issuance has a target size of up to S$150 million, said Aaron Gwak, Standard Chartered Bank's head of capital markets, Asean, in response to queries from BT on Monday.

Standard Chartered Bank (Singapore) is the sole lead manager of the bonds.

Part of the net proceeds will go into repaying an existing loan that was used to construct Nexus's new campus at 1 Aljunied Walk in central Singapore, which will start operations in January 2020.

Nexus will also use the proceeds to finance unpaid expenses for developing the complex, and to on-lend funds to its parent Taylor's Education Pte Ltd (TEPL) to refinance the equity capital injection in relation to the development, according to the preliminary offering circular seen by BT.

The unsubordinated and unsecured bonds are proposed to be issued under the Asean+3 multicurrency bond issuance framework (AMBIF). Asean+3 markets comprise Asean members plus China, Japan and South Korea.

"CGIF's bond guarantee operation aims to support Asean+3 companies in accessing the region's bond markets, and also places importance on promoting bond issuers that provide environmental and social benefits," said Mr Gwak.

If successful, this will be the second debt issuance in Singapore under the AMBIF format, according to the circular.

AMBIF is a policy initiative under the Asian Bond Markets Initiative (ABMI), launched by Asean+3 to facilitate intra-regional bond issuances.

Based on the target issue size of S$150 million, the principal will likely be redeemed in eight instalments: S$5 million each year of 2024, 2025 and 2026, followed by S$27 million each year of 2027, 2028, 2029, 2030 and 2031, according to the circular.

On Monday, S&P Global Ratings assigned an "AA" long-term issue rating to the proposed bond issue. This was based on the unconditional and irrevocable guarantee by CGIF, which also has an "AA" long-term foreign-currency issuer credit rating from S&P.

Nexus is a foreign-system school in Singapore offering programmes from nursery through to the International Baccalaureate diploma, for learners ranging from ages 3 to 18 years old. It had 905 students as at June 30. The international school's new complex will have an expanded capacity of up to 2,000 students.

It will relocate from its current campus at Ulu Pandan Road, near western Singapore, with a capacity of 1,200 students.

The upcoming 12-storey facility will feature two libraries, two restaurants, an Olympic-sized swimming pool, a full-size turf field, a 540-seat theatre and visual-arts studios, among other things. It sits on a nine-acre land parcel with a 30-year lease period.

TEPL is owned by Malaysia's family-owned Educrest, which runs Taylor's Education Group, a school owner and operator with some 20,000 students and 3,000 teachers and administrators in Malaysia, Singapore and Vietnam.