Temasek prices US$2.5 billion in bonds

U.S. five dollar currency note; taken September 2018.

Temasek Holdings has priced US$2.5 billion in notes across 10-year, 20-year and 40-year tranches, Singapore’s state-owned investment company said in a filing to SGX Tuesday.

“There was strong support for the bonds from high-quality institutional, accredited and/or other specified investors globally, across the three tranches,” Temasek said. “Temasek Bonds are issued as public markers of Temasek’s credit quality. They help to increase its funding flexibility
and expand its stakeholder base.”

  • The 10-year T2031-USD Temasek bond: The US$750 million 1.625 percent guaranteed notes due 2031 were priced at a 40 basis point spread over the 10-year U.S. Treasury. The notes were issued at 99.423 percent of the face value, providing a yield to maturity of 1.688 percent a year.
  • The 20-year T2041-USD Temasek bond: The US$750 million 2.375 percent guaranteed notes due 2041 were priced at an 65 basis point spread over the 20-year benchmark U.S. Treasury. The notes were issued at 97.949 percent, providing a yield to maturity of 2.506 percent per annum.
  • The 40-year T2061-USD Temasek bond: The US$1 billion 2.75 percent guaranteed notes due 2061 were priced at an 85 basis point spread over the 30-year benchmark U.S. Treasury. The bond was issued at 98.825 percent, providing a yield to maturity of 2.799 percent per annum.

This is the first time Temasek has issued 20-year and 40-year bonds.

Temasek has been assigned an overall corporate credit rating of Aaa by Moody’s Investors Service and AAA by S&P Global Ratings, with the new issues receiving the same ratings.

S&P Global Ratings assigned the offering an AAA long-term issue rating on Monday.

“We rate the proposed senior notes the same as our long-term issuer credit rating on Temasek, because we do not view the company’s capital structure as having any material subordination risks,” S&P said in a statement Monday.

“The rating on Temasek reflects the company’s large, well-diversified, and high-quality portfolio assets; above-average investment capabilities; and minimal leverage. In addition, we see an extremely high likelihood of extraordinary support from the government of Singapore, if needed,” S&P added.

The net proceeds will be used by Temasek and its investment holding companies to fund their ordinary course of business, the statement said.

The offering is set to close 2 August, with listing on SGX expected on 3 August.

The joint lead managers and bookrunners were Citigroup, Credit Agricole, HSBC, Morgan Stanley and Standard Chartered Bank.