More firms to tap bond market for capital

The local bond market could see more action with three high-profile firms looking to raise funds through note issues, despite a slower start to the year compared with last year.

Healthway Medical Corporation, Yanlord Land Group and Frasers Centrepoint all announced moves yesterday to enter the market to raise capital.

This comes after Mapletree Investments sold $625 million of perpetual bonds last week - the first Singapore dollar bond issue for the year. Last year, five deals worth $991 million were issued over the same period.

Clinic operator Healthway Medical announced before markets opened yesterday that it has entered into an agreement with GW Active to issue $10 million in convertible notes and $60 million in non-convertible notes.

The maturity period is two years from the issue date. The conversion price for the convertible notes is 3.384 cents per share.

Healthway Medical said the notes issue is needed to address short-term liquidity needs and for working capital. "The company has also taken the opportunity to raise additional funding to strengthen its balance sheet to support its growth initiatives," it added.

The company expects to raise net proceeds of about $68.3 million - of which 20 per cent will be used to repay bank borrowings, 20 per cent for general working capital and the rest to pursue growth.

China developer Yanlord Land also announced the proposed issuance of US$450 million (S$639 million) senior notes by its wholly owned unit Yanlord Land (HK) Co.

The notes, with a maturity date of Jan 23, 2022, will bear annual interest of 5.875 per cent, payable semi-annually in arrears. They are expected to be issued on or near Jan 23.

Yanlord Land said the expected net proceeds of around US$444.7 million will go to refinancing debts, project development and acquisitions.

Real estate group Frasers Centrepoint said on the same day that its wholly owned subsidiary FCL Treasury has established a $5 billion Multicurrency Debt Issuance Programme.

The net proceeds from each issue will go to debt refinancing, acquisitions, investment opportunities and general working capital.

Meanwhile, on Monday, DBS Bank said it successfully priced the issue of €750 million (S$1 billion) fixed-rate covered bonds due in 2024. The bonds, which come under the bank's US$10 billion Global Covered Bond Programme, will bear a fixed annual coupon rate of 0.375 per cent, payable yearly in arrears. The settlement date is expected to be Jan 23. The net proceeds will be used for the bank's general business purposes.

A version of this article appeared in the print edition of The Straits Times on January 18, 2017, with the headline 'More firms to tap bond market for capital'. Subscribe