Temasek raises $3.76 billion from bonds, including longest-ever 50-year tranche

Temasek and its investment holding companies will use the net proceeds from the issuance to fund their ordinary course of business.
Temasek and its investment holding companies will use the net proceeds from the issuance to fund their ordinary course of business.PHOTO: ST FILE

SINGAPORE (REUTERS, THE BUSINESS TIMES) - Singapore investment company Temasek Holdings has raised US$2.75 billion (S$3.76 billion) from a clutch of long-dated dollar bonds, including its longest tenor of 50 years, as part of its US$25 billion guaranteed global medium-term note programme.

Temasek’s move is part of a growing trend of companies in Asia selling longer-dated tenures, driven by demand from pension funds and others looking for assets that match their far-distant liabilities. Globally, record-low interest rates have reduced the cost for companies carrying out the deals.

"There was strong support for the bonds from high-quality institutional, accredited and/or other specified investors globally," Temasek said in a statement on Wednesday (Sept 30).

Temasek Financial (I), Temasek’s wholly owned subsidiary, had launched the three-tranche offering comprising a 10-year, a 30.5-year and a 50-year bond on Tuesday.

The final order book was nearly US$5 billion from about 285 accounts, according to a term sheet.

Temasek raised US$750 million in 10-year debt, US$1 billion in the 30.5-year debt and US$1 billion in the 50-year bonds. The 10-year bonds will pay a coupon of 1 per cent, the 30.5-year bonds 2.25 per cent and the 50-year debt 2.5 per cent.

Asian investors were the largest purchasers of the 10- and 50-year bonds, while United States investors picked up most of the 30.5-year paper, the term sheet showed.

Barclays, Citigroup, DBS Bank, HSBC and Morgan Stanley were the joint bookrunners on the deal.

Ranked among the world’s biggest investors, Temasek’s net portfolio value fell 2.2 per cent to $306 billion in the year ended March 2020, the first drop in four years.

Its bonds are issued as public markers of Temasek's credit quality, helping to increase its funding flexibility and expanding its stakeholder base, the investment firm said on Wednesday.

Temasek has been assigned an overall corporate credit rating of Aaa by Moody's Investors Service and AAA by S&P Global Ratings.

The three new bonds are each likewise rated Aaa by Moody's and AAA by S&P.

Temasek and its investment holding companies will use the net proceeds from the issuance to fund their ordinary course of business.

 
 
 

The offering is scheduled to close on Oct 6. The new bonds are then expected to be listed on the Singapore Exchange on Oct 7.

Temasek last sold bonds in November 2019, when Temasek Financial (I)'s 12-year and 30-year notes, each sized at 500 million euros (S$803.6 million), drew strong demand from investors.

In July, Thailand’s largest energy company PTT raised US$700 million from the sale of a 50-year bond in Asia’s longest dollar corporate debt deal.