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.
| Issuer | Aviva Singlife Holdings Pte. Ltd. |
| Issuer Ratings | Baa2 (Moody’s) / BBB+ (Fitch) |
| Expected Issue Ratings | Baa3 (Moody’s) / BBB- (Fitch) |
| Issue | Subordinated |
| Coupon Frequency | Semi-Annually |
| Denomination | SGD 250,000 |
| Initial Price Guidance | 3.75% area (Update: Final Yield 3.375%) |
| Tenure | 10.25 years Non-Callable 5.25 years |
| Issue Date | November 2020 |
| First Call Date | February 2026 |
| Maturity Date | February 2031 |
| Early Redemption Events | At 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 Event | Mandatory 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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