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Temasek sells longest-ever Singapore bond with 50-year offering

·4-min read
An executive prepares to take the stage during the annual Temasek Review in Singapore July 7, 2016. REUTERS/Edgar Su
Temasek sells longest-ever Singapore bond with 50-year offering. (PHOTO: REUTERS/Edgar Su)

By Ameya Karve

(Bloomberg) — Singapore saw the longest-ever bond sale in its credit market as Temasek Holdings Pte priced a 50-year security, adding to a growing list of borrowers globally locking in financing costs near record lows.

The state investor raised S$1.5 billion at 2.8% yield, compared with an initial pricing in the area of 2.85%, according to a person familiar with the matter, who asked not to be identified. The security is a record tenor in the local-currency market for plain bonds sold publicly, according to data compiled by Bloomberg.

Other borrowers around the world that have priced securities with maturities of 30 years or more in recent weeks include Unilever Plc and Apple Inc. Temasek itself last month raised US$2.5 billion in a three-tranche U.S.-dollar deal that included a 40-year part.

Companies and governments have issued some US$894 billion of notes due in three or more decades in 2021, on track for one of the busiest years ever after a record US$1.9 trillion in 2020, according to data compiled by Bloomberg.

The rush to price such debt comes as concern mounts that inflationary pressures could push up funding rates ahead. Central bank officials have been debating when and how to begin paring unprecedented stimulus to fight the Covid-19 pandemic.

Temasek recently warned that a temporary rise in inflation could be a risk to global markets, as it posted its biggest annual return since 2010 for the fiscal year ended March 31.

The firm’s only previous 50-year bond was a $1 billion U.S. dollar offering last year.

The investor issued the new Singapore dollar security through unit Temasek Financial (I) Ltd. It will provide the proceeds to Temasek and its investment holding companies to fund their ordinary course of business, it said in a filing.

Temasek’s offering comes after a rush from companies on Monday to issue new debt in U.S. and European bond markets ahead of a closely-watched inflation metric this week, delaying the usual summer slowdown; read more: Borrowing Blitz Sweeps Credit Markets as Summer Slowdown on Hold.

Asia

Three issuers — PCGI Holdings Ltd., Sichuan Development Holding Co. and Zhuhai Huafa Group Co. — on Tuesday lined up banks for possible dollar bond sales, while at least one borrower, Shangrao Innovation Development Industry Investment Group Co., was set to price debt in the greenback.

  • In the secondary market, China Evergrande Group’s dollar bonds climbed Tuesday morning after a report that the developer is in talks to sell stakes in multiple subsidiaries

  • Spreads on Asian investment-grade dollar bonds narrowed as much as 2 basis points, traders said. That leaves the yield premiums potentially set for a sixth straight day of declines, the longest streak since June, according to a Bloomberg Barclays index

  • Read Indonesia credit wrap: Dollar Bonds Beat Asian Peers on Green Shoots

U.S.

A recent selloff in rates and a rush by dealers to clear pipelines ahead of an expected slowdown later this month fueled on Monday one of the most crowded days in the U.S. high-grade market this year.

  • Dawn Acquisitions, a data firm backed by Brookfield Infrastructure, will likely need additional help from its sponsor if it’s going to tackle its high leverage and a strategic pivot, according to Moody’s Investors Service

  • Bombardier Inc. sold US$750 million in high-yield debt to refinance bonds due in the next two years, just as S&P Ratings raised its outlook on the planes and trains maker to stable

  • For deal updates, click here for the New Issue Monitor. For more, click here for the Credit Daybook Americas

Europe

ECB Governing Council member Jens Weidmann, who is also president of Germany’s Bundesbank, warned that inflation in the euro area could pick up faster than expected, and urged not to drag out the institution’s pandemic bond-buying program.

  • The hunt for yield is back for investors in emerging markets, albeit with caution. Quasi-sovereign bonds, notes from companies at least partially owned by a government, are in vogue for firms including Goldman Sachs Group Inc. and Barings LLC

© 2021 Bloomberg L.P.

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