Temasek to sell S$1bn of AAA bonds

Singapore state investor Temasek yesterday said it priced its S$1 billion ($703.7 million, Dh2.58bn) 10-year bond at 40 basis points above the Singapore dollar swap offered rate, confirming an earlier Reuters report.

The price, which translates into 3.265 per cent per year, was at the tighter end of the initial guidance of 40 to 45 basis points over swap, indicating strong investor demand for AAA-rated issues, sources said yesterday.

Temasek said in a statement that proceeds from the bond issue will be used by the Singapore wealth fund and its investment holding companies "to fund their ordinary course of business".

Temasek has been tapping the bond market aggressively in recent months, but is yet to announce any major deals.

Like many other sovereign wealth funds around the world, it suffered heavy losses during the global financial crisis, particularly on investments in United States and United Kingdom banks. But the value of its portfolio rebounded significantly last year as stock markets rallied around the world.

The Singapore fund, which has more than $120bn in assets, last week raised the size of its medium-term notes programme to $10bn from $5bn to give itself more room to borrow. The bankers for the Temasek bond, rated AAA by Standard & Poor's and Moody's, were DBS, Standard Chartered Bank, ANZ and HSBC, banking sources said.

 

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