Temasek offers 5-year Singapore dollar bonds of up to S$350m at 1.8%

TEMASEK on Monday (Nov 15) said it is offering new 5-year bonds through its wholly-owned subsidiary Temasek Financial (IV).

The T2026-S$ Temasek Bond comprises 1.8% fixed rate guaranteed notes that will mature in 2026.

The proposed total offering of up to S$350 million in aggregate principal amount comprises a placement of S$250 million of bonds to institutional, accredited and other specified investors as well as a public offer of up to S$100 million of bonds to retail investors in Singapore.

There is a potential to upsize the offer to a maximum of S$500 million if there is oversubscription.

Temasek said the 1.8 per cent coupon was determined through an institutionally-driven bookbuilding process. 

This is payable at the end of every 6-month period, and has a tenor of 5 years from the expected issue date of Nov 24. The bonds will be cleared through the Central Depository (CDP).

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For the placement tranche, applications must be in multiples of S$250,000, subject to a minimum subscription of S$250,000. As for the public offer tranche, applications must be in multiples of S$1,000, subject to a minimum subscription of S$1,000.

Retail investors in Singapore will need their own individual CDP account to apply for this bond, with each person only allowed to make 1 application under the public offer.

Temasek said Central Provident Fund (CPF) savings and Supplementary Retirement Scheme (SRS) funds cannot be used to apply for the T2026-S$ Temasek Bond in the public offer and placement.

Applications under the public offer are payable in full immediately, and must be made in Singapore through the ATMs or Internet banking websites of DBS, POSB, UOB or OCBC, or the mobile banking apps of DBS, POSB or UOB.

The public offer for retail investors is expected to open at 9am on Nov 16 and to close at noon on Nov 22.

Temasek said subscriptions under the public offer will be subject to an allocation process if the total subscriptions exceed the amount available for subscription under the public offer. It added that it will take into account the investor demand from applications received before deciding on the final allocation approach. 

Issued under Temasek Financial (IV)'s S$5 billion guaranteed medium term note programme, the bonds will be unconditionally and irrevocably guaranteed by Temasek and are intended to be listed on the Singapore Exchange.

Temasek has been assigned an overall corporate credit rating of "Aaa" by Moody's Investors Service and "AAA" by S&P Global Ratings. 

The T2026-S$ Temasek Bond has also been rated "Aaa" by Moody’s and "AAA" by S&P.

“Temasek's 'Aaa' rating reflects its strong fundamental credit quality as an investment company, supported by steady dividend income and a large and high-quality investment portfolio,” said Jacintha Poh, a Moody's vice-president and senior credit officer.

The bond will be the second bond by Temasek with a retail tranche. The first was the 5-year T2023-S$ Temasek Bond launched in 2018, which closed at a fixed interest rate of 2.7 per cent per annum.

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