ST Engineering pricing five-year and 10-year USD bonds: Client note

U.S. one-dollar currency notes; taken September 2018.U.S. one dollar bills.

ST Engineering, via subsidiary ST Engineering Urban Solutions USA, is pricing five-year and 10-year benchmark bond offerings, according to a client note seen by Shenton Wire Tuesday.

The initial pricing guidance for the five-year notes is the five-year U.S. Treasury note yield, which is around 2.85 percent, plus 100 basis points, the client note said.

For the 10-year notes, the initial pricing guidance is the 10-year U.S. Treasury note yield, currently around 2.80 percent, plus 135 basis points, the client note said.

The client note said the offering size is “benchmark.” Typically, this would indicate a size of at least US$500 million.

The bonds are expected to be rated AAA by Moody’s Investors Service, in line with the ratings agency’s rating on ST Engineering, the client note said; the Moody’s outlook on the issuer rating is negative, the client note said.

The proceeds will be used to fund new capital expenditure, acquisitions, general corporate purposes and/or refinancing existing borrowing, the client note said.

The notes will be issued under ST Engineering’s S$5 billion medium term note program, the client note said. The program was amended earlier this month, with the company saying proceeds from the program would be used to refinance the acquisition of TransCore.

The joint global coordinators and bookrunners are J.P. Morgan, DBS Bank and Standard Chartered Bank, while the joint bookrunners are BofA Securities, Credit Agricole CIB, OCBC Bank and Societe Generale, the client note said.