Singapore’s state investment agency Temasek Holdings kicked off a busy week with a $1.7 billion dual-tranche bond offering aimed at establishing a pricing benchmark in the public markets. It was the first triple-A paper out of Asia since Hong Kong's MTRC priced a $300 million bond in March — Temasek is rated AAA by Standard & Poor’s and Aaa by Moody’s.
The $1.2 billion 10-and-a-half-year tranche priced at Treasuries plus 100bp and the $500 million 30-year tranche priced at Treasuries plus 95bp, about 5bp and 10bp, respectively, inside the initial guidance of Treasuries plus 105bp for both tranches.
Temasek’s bonds performed well in secondary markets, with the 2023s tightening to Treasuries plus 97bp/95bp and the 2042s tightening to Treasuries plus 91bp/89bp.
The deal attracted an order book of $7.6 billion from 284 investors, with a large chunk allocated to US investors. For the 10-and-a-half-year tranche, US investors were allocated 56%, Asian investors were allocated 27% and European investors 17%. By investor type, asset managers were allocated 54%, pension funds and insurers 19%, central banks 10%, hedge funds 9%, retail 3% and the remaining 5% went to other investors.
For the 30-year tranche, US investors were allocated 50%, Asian investors 30% and European investors 20%. Asset managers were allocated 51%, insurers and pension funds 33%, banks 5%, hedge funds 8% and retail investors 3%.
The coupon for the 10-and-a-half-year bond was fixed at 2.375% and the notes reoffered at 99.163 to yield 2.466%. The coupon for the 30-year bonds was fixed at 3.375% and the notes reoffered at 97.653 to yield 3.502%. Citi, Deutsche Bank, Goldman Sachs and UBS were joint bookrunners.
Otherwise, debt capital markets look poised to be active during the next couple of weeks. “It looks like it will be busy,” said one banker. “Markets have been constructive and there are only a few days left before summer holidays.”
Among the issuers planning to tap the market is China Fishery, which kicks off fixed income investor meetings in Asia, Europe and the US today. HSBC, Bank of America Merrill Lynch, Standard Chartered, ANZ, Jefferies, Rabo Securities and Deutsche Bank are the arrangers. Judging by the presence of banks that are not active in the debt capital markets, the company mandated a number of its lenders. A dollar bond may follow subject to market conditions. China Fishery is rated Ba3/BB-/BB.
Guoco Group will be starting two-day investor update meetings in Hong Kong and Singapore today. Credit Suisse, HSBC and UBS are arrangers. Guoco Group is unrated and this would be its first dollar bond, if it taps that market.
Elsewhere, Hong Kong-based conglomerate New World Development held investor update meetings in Singapore on Monday and Hong Kong on Tuesday. HSBC and UBS were the arrangers.
Also, State Bank of India started a series of fixed-income investor meetings in Singapore, Hong Kong, Frankfurt, London and the US on Monday, and concludes them on Friday. A potential US dollar senior bond may follow. Bank of America Merrill Lynch, Barclays, Citi, Deutsche Bank, J.P. Morgan and UBS are joint arrangers.
Meanwhile, the Democratic Socialist Republic of Sri Lanka was set to price a 10-year dollar benchmark early this morning. Bank of America Merrill Lynch, Barclays, Citi and HSBC were joint bookrunners.
