In September, Aviva and Singlife have announced that they are merging into one company. For funding the purchase consideration of acquisition and capital adequacy purposes, they have issued a new bond today. This should attract strong interest. Below are the technical details of the bond.

The Issuer

The bond issuer, ASH, is the holding company of Aviva Ltd. and Singapore Life Pte. Ltd. post the merger of the two entities.

As of 30 June 2020, total assets and shareholders’ equity of Aviva Ltd. registered SGD11.5 billion and SGD663 million, respectively. On the other hand, the total assets and shareholders’ equity of Singapore Life Pte. Ltd. were $521 million and $114 million, respectively. ASH is 34.6% owned by TPG, 24.9% by Aviva UK, 14.9% by Sumitomo Life, and 25.6% by existing shareholders of Singlife.

The Bond

Aviva Singlife Holdings Pte. Ltd. (ASH) bond is a callable subordinated note at an Initial Price Guidance of 3.75% callable in 5.25 years and maturing in 10.25 years.

IssuerAviva Singlife Holdings Pte. Ltd.
Issuer RatingsBaa2 (Moody’s) / BBB+ (Fitch)
Expected Issue RatingsBaa3 (Moody’s) / BBB- (Fitch)
Coupon FrequencySemi-Annually
DenominationSGD 250,000
Initial Price Guidance3.75% area (Update: Final Yield 3.375%)
Tenure10.25 years Non-Callable 5.25 years
Issue DateNovember 2020
First Call DateFebruary 2026
Maturity DateFebruary 2031
Early Redemption EventsAt par in whole, but not in part, at the option of the Issuer on the First Call Date and any other Interest Payment Date thereafter
Redemption for Acquisition Failure EventMandatory redemption at 101% if the acquisition of Aviva Singapore and Aviva Asia is not completed within 3 months of the Issue Date

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About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
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