Singapore’s NEA pricing benchmark 10-year and 30-year bond offering: Client note

Singapore one dollar bill

Singapore’s National Environment Agency is pricing benchmark 10-year and 30-year bonds, likely among the first notes the city-state’s government has issued since the 1990s to finance infrastructure spending.

Since the 1990s, the government has used its reserves to finance infrastructure spending, but this year, it has said it plans to use debt to finance projects expected to be in use for at least 50 years, citing near-zero interest rates, according to a Straits Times article.

While the benchmark status of NEA’s offerings suggest an offering size of at least S$250 million, the need for further infrastructure spending indicates these deals could be larger and could be followed by more.

The 10-year notes are expected to price at 1.67 percent, while the 30-year notes are expected in the 2.55 percent area, subject to market conditions and demand, the client note said.

“The net proceeds will be allocated to finance or refinance new or existing eligible green projects,” based on NEA’s green bond framework, the client note said.

The notes will be issued under NEA’s S$3 billion multi-currency medium-term note program, and will be in denomination of S$250,000, the note said.

DBS Bank is the sole bookrunner for the deal, according to the client note.