Temasek's first retail bond 7 times oversubscribed

Temasek Holdings' first retail bond is just over eight times subscribed.

Given the heavy demand, an upsized option may be exercised, The Business Times understands.

The retail public offer of the up-to-S$200 million, five-year, 2.7 per cent bond closed on Tuesday at noon, and valid applications received totalled S$1.68 billion representing a subscription rate of just over eight times, Temasek said in a press statement.

An allocation will take place and the results of the allocation process, plus if the upsized option is exercised, will be announced by Wednesday evening.

Temasek had offered up to S$400 million 2.70 per cent guaranteed notes due 2023 (subject to the upsized option), to be issued through its wholly-owned subsidiary Temasek Financial (IV) Private Limited, under its S$5 billion Guaranteed Medium-Term Note Programme.

The total offer is subject to an option to upsize the issuance to S$500 million, in the event that the public and/or placement offer is oversubscribed.

Clifford Lee, DBS Bank global head of fixed income, said the robust demand for the offering, leading to sizeable oversubscription, is a signal that investors are looking for high-quality retail bonds from top-rated issuers.

Called the T2023-S$ Temasek Bond, a tranche of S$200 million of the bonds offered to institutional investors last week was 7.19 times subscribed and orders reached S$1.438 billion.

"Temasek's offering of the same rate to retail investors, determined through a book-building process for the institutional tranche, is an important step in price transparency," he said.

"The process saw central banks, insurance companies and fund managers provide price leadership and anchor interest in the offering before the retail tranche opened.

"In light of the strong reception for the T2023-S$ Temasek Bond, we hope to see more retail bond offerings from quality issuers, with the same execution style, in the future."

Trading of the bonds on the mainboard of SGX-ST will start on Oct 26.

Temasek has an overall corporate credit rating of Aaa by Moody's and AAA by S&P. The bonds have been rated Aaa by Moody's and AAA by S&P.

This article was first published in The Business Times. Permission required for reproduction.