Unlike Temasek’s tightly held bonds, the
new notes from LTA, whose paper tends to be
more liquid, are more likely to set a new local
benchmark. The Singapore government does
not issue bonds with tenors longer than 30
years and the Singapore dollar SOR curve
stops at 30 years as well.
The deal was LTA’s second new offering this
year, after the statutory board sold S$1.2bn of
10 and 30-year bonds at 2.75% and 3.35% in
March. This was followed by a S$300m tap of
the 30-year bonds in late March.
Despite the large issuance in March, LTA
drew robust demand for its new offering.
Distribution data were not disclosed but
ORDERSûWEREûMOREûTHANûSUFlCIENTûTOûINCREASEû
the size from a S$1bn minimum target.
Insurance companies and fund managers
were major purchasers of the notes.
Lacking comparable references, joint lead
managers and bookrunners DBS, OCBC,
Standard Chartered Bank and UOB had to price
the new notes using LTA’s 2048s as a guide.
“The 2048s priced at a spread of 37bp over
SOR and the new 2058s are at a spread of 54bp
over an extrapolated 40-year SOR,” said one
banker involved in the deal. “That does give a
decent premium for investors. In addition, the
absolute yield of 3.45% is optically a nice pick-up
over the 3.35% paid on the 30-year notes.”
The establishment of a 40-year benchmark
furthers Singapore’s goal to become an
infrastructure funding hub for the region. As
part of the push, the government has
encouraged statutory boards to raise funds in
the local market for large-scale projects.
Minister for Finance Heng Swee Keat in
&EBRUARYûmOATEDûTHEûIDEAûOFûEXTENDINGû
guarantees to boost fundraising in the local
bond market for such projects.
Infrastructure spending in the city-state is
EXPECTEDûTOûRISEûTOû3BNûINûlSCALû ûAû
sharp jump from S$8.5bn in 2011. The bulk of
the expenditure is in housing and transport,
including a new terminal at Changi airport.
Still, bankers are not expecting an
IMMEDIATEûmOODûOFûLONG
DATEDûDEBTûOFFERINGSû
as there are only a few issuers who require
such tenors to match long-term assets.SOUTH KOREA
HYUNDAI SHRUGS OFF JGB VOLATILITYHYUNDAI CAPITAL SERVICES returned to the
3AMURAIûMARKETûFORûTHEûlRSTûTIMEûSINCEû
October 2015 with a total ¥22bn (US198m)
THREE
TRANCHEûTRANSACTION ûINCLUDINGûAûlVE
year piece, the issuer’s longest tenor so far.This is the third yen deal from South
Korea after the June 12 summit between
the US and North Korea.
The transaction comprised ¥12.4bn
0.34% two-year, ¥5.5bn 0.40% three-year,
ANDûcBNûûlVE
YEARû4HEûSPREADSû
over yen offer-side swaps were 24bp, 29bp,
and 49bp, all inside the tighter end of the
price guidance ranges during the soft-
sounding period of 25bp–30bp area,
30bp–35bp area, and 50bp area, due to
quite strong demand for the capped offer
size.
Investor demand already exceeded
(YUNDAISûEXPECTATIONSûBEFOREûOFlCIALû
marketing began.
“It went oversubscribed on Friday [July
= û$AYû4WOûOFûSOFT
SOUNDING vûSAIDûAû
banker on the deal. “That helped us
NARROWûGUIDANCEûRANGESûSTEADILYvû/FlCIALû
marketing started on July 23.
Strong demand and a capped issue size
also helped the deal price well inside the
issuer’s US dollar curve. According to
calculations by market sources, the
Samurai trade was about 10bp–20bp inside
in all three tranches.
“Everyone may start looking to issue
Samurais if they look at this deal,” said a
second banker on the deal.EMERGING MARKETS ASIA-PACIFIC3.45% area - - - DBS/OCBC/StCh/UOB -
T+145 area,
T+125 (+/-2.5)
- US$1.7bn A1/A+ BAML/CA-CIB/SG/UBS/HSBC Bank 39%, FM 33%, CBank/Ins 18%, HF/
PB/Sec 10%.
Par - - Ba2/-/BB Citi -
9% area,
8.625%
- US$1.5bn B3/B/BB- HSBC/MS/CNCBI/CISI/CMBI/Guotai
Junan/ICBCI/Nomura
Asia 78%, EU 22%. FM/Sec 80%, Bank/
Ins 11%, PB 6%, Other 3%.
3mL+250 area,
3mL+230
- Baa3/-/BBB- HSBC/GS/UBS/CNCBI/SPDB -
9.5% area - - -/-/BB+ Haitong /CCBI /CEBI/CISI/JPM/
YueXiu
T+90/95, T+80
area, T+75 area +/-3
US$4.7bn Aaa/AAA BAML/Citi/HSBC/MS US 46%, Asia 44%, EMEA 10%. AM 43%,
CB/Agcy 25%, Bks 14%, Ins/PF 9%, Corp
7%, PB 1%, Other 1%.
T+155 area,
T+130/135
- US$2.8bn Baa1/BBB+ BAML/BNPP/HSBC/StCh Asia 54%, Amers 33%, EMEA 13%. FM
63%, Ins/PF 25%, Bks 11%, PB 1%.
3mL+485 (the #) - US$800m Ba2 BOCI/CISI/Haitong/Orient Asia 99%, Eur 1%. FM/AM 53%, Bks/Sec
33%, PB/Corp 11%, SWF 3%.
3mL+85 area,
3mL+60/65
US$1.3bn, >80 acs Aa2/AA- Citi/CMZ/CA-CIB/HSBC Asia 45%, US 28%, EMEA 27%. CB/Agcy
53%, Tsy 27%, FM/Ins 17%, Corp/PB/
Other 3%.
3mL+285 area,
3mL+260 (+/-2.5)
- .US$1.1bn -/-/BBB HSBC/DBS/CICC/CNCBI/CMBI/
GuotaiJunan/Orient/SPDBI
Asia 98%, Other 2%. FM 57%, Bks 32%,
Retail/Other 11%.
6.5% (the #) - US$475m -/BBB-/BBB- BoC/Barc/Citi/Industrial/CCBA/
CNCBI/Everbright/GuotaiJunan
Bks 55%, FM 35%, PB/Corp/Sec 10%.7.7% area - US$850m after IPG B2/B/BB- CISI/CMSHK/DB/OCBC Asia 98%, Eur 2%. FM/AM 76%, Bks
16%, PB 8%.
OS+23/27,
OS+24/26,
OS+24/25
- -/A-/JCR A+ Citi/MUMSS/Miz -
OS+29/31,
OS+29/30
- -/A-/JCR A+ Citi/MUMSS/Miz -
OS+49/50 - - -/A-/JCR A+ Citi/MUMSS/Miz -
2.52% (the #) - - A3 CIMB -
- -/BBB+/BBB- CIBC/CS -
Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution