Would you buy a 50 years bond with only 2.7% interest? Probably not. But when Temasek issues such bonds, they are oversubscribed. I explained before that contrary to many false beliefs, Temasek doesn’t invest CPF’s money, given the good reputation, they have their own way of sourcing for cheap funds. And this is a good example.
Temasek Holdings has just launched a three-tranche offering of senior unsecured US dollar (USD) bonds through its subsidiary Temasek Financial (I) Limited (TFin-I).
According to Business Times, 55% of the 50-year bond was bought by fund managers, while pension funds and insurance firms accounted for 37%. The rest included central banks, sovereign wealth funds, hedge funds, private banks, and securities firms.
By geography, 58% of investors are originated from Asia, followed by a third from the US and Europe. There are 9% of investors from the Middle East and Africa (EMEA).
The offering comprises a 10-year T2030-USD Temasek bond, a 30.5-year T2051-USD Temasek bond, and a 50-year T2070-USD Temasek bond. They will be unconditionally and irrevocably guaranteed by the Singapore state investment firm.
The new bonds will be issued under TFin-I’s US$25 billion guaranteed global medium-term note program. For your convenience, I have compiled the information below.
|Bond Issuer||Temasek Financial (I) Limited|
|Bond Guarantor||Temasek Holdings (Private) Limited|
|Initial Price Guidance||CT10 + 75bps area |
|OLB30 + 110bps area |
|OLB30 + 135bps area |
|Maturity Date||6 Oct 2030||6 Apr 2051||6 Oct 2070|
|Expected Issue Ratings||Aaa (Moody’s) / AAA (S&P)|
|Guarantor Ratings||Aaa (Moody’s) / AAA (S&P)|
|Denomination||USD 250,000 / USD 1,000|
|Make Whole Call|
|More Information||TEMASE 06Oct2030 Qsov (USD)||TEMASE 06Apr2051 Qsov (USD)||TEMASE 06Oct2070 Qsov (USD)|
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