Standard Chartered announced on Friday that the size of its first Sing dollar-denominated bond of 2003 - launched on Monday - was increased from S$200 million ($115.3 million) to S$300 million, following "overwhelming response from investors."
StanChart lead managed the transaction, with by Credit Suisse First Boston, Lehman Brothers, Moscow Narodny Bank and UBS Warburg acting as co-managers.
The coupon of the five-year notes was fixed at 2.35% p.a., payable semi-annually to investors. The bonds priced at 99.99 to yield 2.354%, which currently represents a spread pick up of 59bp over five-year government bonds and between 30-35bp over swaps.
The transaction was two times oversubscribed, which according to StanChart reflects not only the confidence that investors have in the bank and the Sing-dollar bond market. Most participants in the market will hope the last part of that statement is true given a disappointing year for corporate bonds last year. New issuance in 2002 was below $$7 billion, compared to over S$14 million in 2001.
However, DCM bankers at StanChart are cautious in predicting an upsurge in issuance in the coming months, believing that "depends on the interest rate environment and the corporate scene in terms of M&A activity in Singapore, like what happened in 2001."
According to the bank, investor interest for the current deal came from asset managers, banks, insurance companies, as well as cash-rich corporations. Proceeds from the deal will be used to fund on-going business growth.
