Temasek Holdings launches first public bond offer to retail investors
Temasek Holdings has launched its first public bond offer to retail investors.
It comes with a five-year maturity and a fixed interest rate of 2.7 per cent.
Temasek is offering up to $200 million to retail investors with $200 million on placement for institutional, accredited and other investors.
The T2023-S$ bond is issued under Temasek's $5 billion Guaranteed Medium Term Note Programme.
The offer could be increased to $500 million if the public or placement offer is oversubscribed.
Temasek chief financial officer Leong Wai Leng said: "This helps Temasek to broaden its stakeholder base and provide Singapore retail investors the opportunity to participate in another retail product. (The bonds) also increase our funding flexibility."
Temasek has an overall 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.
The net proceeds from the total offering will be used for the investment firm's business operations.
Sources expect the offer to be strongly subscribed. At 2.7 per cent, the bond's interest rate is about 38 basis points over the five-year Singapore government bond, which is trading at about 2.32 per cent.
The latest Singapore Savings Bond has an interest rate at the five-year mark of 2.54 per cent. Its average annualised return at the end of the fifth year is 2.22 per cent.
Mr Santosh Bukitgar of Credit Suisse said the credit risk is minimal: "Temasek being one of the few non-sovereign AAA-rated credits."
But he added that investors will still be exposed to interest rate risk: "An exit before maturity could incur capital losses if rates trend higher as expected."
The fixed interest rate of 2.7 per cent is payable every six months. The bond will be issued in denominations of $1,000 to retail investors. The issue price is $1,000. - THE STRAITS TIMES
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