Frasers Property upsizes green notes to S$500m following strong demand

FRASERS Property on Thursday (Sep 16) announced that it has upsized its 5-year green notes from S$420 million to S$500 million after noting that demand for its earlier offer was oversubscribed.

The final public offering will now stand at S$350 million, while the final placement tranche is S$150 million. The coupon rate remains at 4.49 per cent.

All valid applications under the public offering shall receive at least some allocation of the notes, said the group in its bourse announcement.

The increase in issuance size comes after the group’s earlier offer, which had been open for applications for 6 days from Sep 9, was 1.48 times subscribed for its initial public offer of S$300 million and 2.04 times subscribed for the S$120 million initial placement tranche.

It has received public applications amounting to S$444.3 million, while the order book from institutional investors came in at S$245 million.

The total valid applications for the notes amounted to S$689.3 million, which represents a subscription rate of about 1.64 times of the initial offer.

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According to deal statistics seen by The Business Times, Singaporean investors made up 98 per cent of the demand for the placement tranche.

Of a total of 33 investors, 74 per cent was taken up by private banks, 14 per cent by fund managers, insurers or pension funds, and 12 per cent allocated to banks, noted Edmund Leong, head of group investment banking at UOB, which was one of the book runners for the deal.

Unless previously redeemed or purchased and cancelled, the notes will be redeemed on Sep 16, 2027. Noteholders will receive semi-annual interest payments on Mar 16 and Sep 16 each year, starting on Mar 16 next year.

The bonds are expected to be issued on Friday and will commence trading on the mainboard of the Singapore Exchange at 9 am under the stock code “EHZB”. Each board lot will comprise S$1,000 in principal amount of the bonds.

Said Loo Choo Leong, group chief financial officer of Frasers Property: “We are pleased to receive such strong investor interest in our inaugural green note issuance. We would like to thank investors for their support in our journey as we continue to build a green and sustainable portfolio of properties and projects across our business value chain.”

Leong said that the combination of the strong name recognition of the Frasers Group, the 5-year tenor of the bond, and the fact that this is the first corporate green bond that retail investors can participate in, made the offering a highly attractive proposition for investors. 

“The robust reception is a clear demonstration of investor confidence in the company and of the ample liquidity amongst retail investors for the right credits,” he added.

Samuel Gan, head of debt capital markets at the Singapore Exchange, commented that they have been seeing steadily growing interest from issuers to issue and list labelled green, social, sustainability and sustainability-linked bonds.

“Such labelled bonds provide tangible benefits to issuers, including potentially tighter pricing and improved investor diversification, with many institutional investors now incorporating ESG (environmental, social and governance) criteria into their investment decisions and running sustainability-related mandates,” he said.