Banks vying for largest-ever HDB bond issue

Banks are bidding for the largest issue yet from HDB, totalling up to S$1.6 billion.
Banks are bidding for the largest issue yet from HDB, totalling up to S$1.6 billion.ST PHOTO: STEPHANIE YEOW

SINGAPORE - Banks are bidding for the largest issue yet from Housing & Development Board, totalling up to S$1.6 billion, IFR reported on Friday (Jan 15).

The Singapore statutory board has asked banks for proposals to sell a seven-year bond for a target size of S$1 billion and a S$600 million greenshoe, said IFR, a Thomson Reuters publication.

If it does achieves the maximum deal size, it will beat its largest single issue, when it sold a S$1.5 billion 1.875 per cent four-year issue in November 2013, IFR said.

Bids are due to be submitted on Monday (Jan 18), it added.

HDB obtained its first rating in October when Moody's scored it Aaa, the top rating, increasing its appeal to the asset liability management desks of banks.

The rated HDB notes will now have a zero risk-weighting and qualify as Level 1 high-quality liquid assets under the Monetary Authority of Singapore's rules on liquidity coverage ratios, said IFR. Previously, the unrated notes qualified as a Level 2 HQLA and were subject to a 15 per cent haircut under LCR rules, it added.