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 | ||
Bond Currency | USD | ||
Initial Price Guidance | CT10 + 75bps area (Est. 1.403%) | OLB30 + 110bps area (Est. 2.515%) | OLB30 + 135bps area (Est. 2.765%) |
Tenure | 10-year | 30.5-year | 50-year |
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 | ||
Coupon Frequency | Semi-Annually | ||
Seniority | Senior Unsecured | ||
Exchange Listed | SGX | ||
Coupon Type | Fixed | ||
Features | Callable | ||
Make Whole Call | |||
More Information | TEMASE 06Oct2030 Qsov (USD) | TEMASE 06Apr2051 Qsov (USD) | TEMASE 06Oct2070 Qsov (USD) |
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