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 IssuerTemasek Financial (I) Limited
Bond GuarantorTemasek Holdings (Private) Limited
Bond CurrencyUSD
Initial Price GuidanceCT10 + 75bps area

(Est. 1.403%)

OLB30 + 110bps area

(Est. 2.515%)

OLB30 + 135bps area

(Est. 2.765%)

Maturity Date6 Oct 20306 Apr 20516 Oct 2070
Expected Issue RatingsAaa (Moody’s) / AAA (S&P)
Guarantor RatingsAaa (Moody’s) / AAA (S&P)
DenominationUSD 250,000 / USD 1,000
Coupon FrequencySemi-Annually
SenioritySenior Unsecured
Exchange ListedSGX
Coupon TypeFixed
Make Whole Call
More InformationTEMASE 06Oct2030 Qsov (USD)TEMASE 06Apr2051 Qsov (USD)TEMASE 06Oct2070 Qsov (USD)

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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.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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