COUNTRY REPORT SINGAPOREacquisition of 32-storey Grade A office
building Chevron House. HSBC and
Hong Leong Finance joined in limited
syndication. The facility pays an interest
margin of 75bp over the cost of funds for
participating banks, according to LPC data.
Maybank also coordinated a S$744.6m
five-year loan backing the US$499m
purchase of a former Housing and Urban
Development Corporation estate Serangoon
Ville in March. Three other lenders joined.
The margin on the Serangoon Ville
loan is slightly higher than the Chevron
House financing, and is also benchmarked
over the cost of funds of the participating
lenders.
Oxley’s most recent loan was a S$150m
20-month facility for working capital
purposes in July, according to LPC data.
Credit Suisse was the mandated lead
arranger and bookrunner of the deal, which
attracted Shanghai Pudong Development
Bank and Bank of East Asia.
Oxley, a developer of high-end
residential, commercial and industrial
projects, has operations in Singapore,
the United Kingdom, Ireland, China,
Cambodia, Malaysia, Myanmar, Indonesia
and Japan.› OUB CENTRE SIGNS S$370M REFIOUB CENTRE has signed a S$370m three-year
refinancing with four banks.
Maybank and Standard Chartered took
S$110m each, while Bank of East Asia and
Great Eastern Life came in with S$100m and
S$50m, respectively.
The loan, which closed as a club, will be
drawn soon.
The facility refinances a three-year loan
of the same size signed in September 2015.
ANZ, Maybank and StanChart were the
lenders on the previous club transaction.
The borrower is the developer and
manager of One Raffles Place, formerly
OUB Centre, in Singapore’s central business
district.RESTRUCTURING
› ASL MARINE PLANS UPDATESASL MARINE HOLDINGS will hold informal
meetings with bondholders on September
18 to give an update on its financial health.
The offshore marine services company
also plans to brief the investors on its
discussions with bankers on obtaining
additional working capital facilities. The
company needs the facilities for ship repair
projects, which will raise its business
volume.
In a note to bondholders, ASL Marine said
it has yet to recover fully from the severe
downturn in the oil and gas industry. In its
latest annual financial results ending June
30, the group’s revenue fell 18% year on
year, with prospects for a quick recovery
over the next 12 months remaining dim.
The company obtained bondholder
approval in January last year to extend
an original total of S$150m (US$108.7m)Commerzbank revives Singapore T2
Bonds First T2 bond since November achieves significant cost savingsCOMMERZBANK last Monday lit a spark in
Singapore’s bond market with a S$400m
(US$290m) 10-year non-call five bond that
has revived interest in Tier 2 offerings.
The bond, priced at par to yield 4.2%, was
the German bank’s second Tier 2 issue in
Singapore and again achieved significant
savings that made its diversification into
other currencies a smart move. More
European banks are expected to explore
raising bank capital in the Singapore dollar
market following the deal.
Investors welcomed the deal – the first Tier
2 bond in the currency since Barclays sold
S$200m of 12.5-year non-call 5.5 notes in
November at 3.75%. Orders had built to over
S$1.2bn, before attrition set in after guidance
was tightened. Final orders of over S$950m
were recorded from more than 90 accounts.
Fund managers and insurance companies
bought 59% of the deal, with private banks
taking 36%, leaving banks with 5%. The deal
attracted a fair amount of foreign investors,
with those from Hong Kong taking 16%,
Taiwan taking 3% and Europe 5%. The
remaining 76% was taken by Singapore.
Commerzbank’s Tier 2 notes are expected
to be rated Baa3/BBB–/BBB, below the
issuer ratings of A1/A–/BBB+.
The Singapore dollar offering came after
the German bank completed a A$250m
(US$165m) 5.5% 10-year bullet last month,diversifying into the Australian market for the
first time for Tier 2 funds.SINGAPORE SCARCITY
No Tier 2 notes have been sold in Singapore
this year. UK-based Lloyds Bank was on
the verge of launching a deal in May but
cancelled it because of internal issues,
sources said.
The Singapore market is generally under-
supplied in high-yielding bonds. Only a few
high-yielding deals have been sold this year,
including the recent Additional Tier 1 bonds
from local banks and a handful of Chinese
high-yield deals.
As a result, said one banker on the deal,
there was a lot of pent-up demand for highly
structured deals that yielded extra returns
from high-grade and familiar credits.
“The volume of Singapore dollar deals is
slightly skewed by the large issues sold by
the statutory agencies, including those of
Housing and Development Board and Land
Transport Authority of Singapore. In terms
of numbers, there were only 71 deals done
this year compared with 124 done last year,”
said the banker, explaining why demand was
robust for the notes.
Other bankers said Singapore investors
would still be interested in buying more such
risky assets but they remain selective about
the issuers.The Commerzbank bond was trading flat
last Tuesday morning, though private banks
were starting to come into the secondary
market to pick up some of the notes.
The lead banks used the German bank’s
4% Tier 2 euro-denominated bullet Tier 2
due in 2026 as one reference. The notes were
quoted at 4.86% in Singapore dollars on a
post-swap basis, but after accounting for the
shorter tenor, the new notes still achieved
double-digit basis point savings, said the
banker.
Investors did not leave the table empty-
handed as the new notes provided a bit of a
pick-up over Commerzbank’s outstanding
Singapore dollar Tier 2 notes. Those
notes, callable in 2022, were trading at an
equivalent of 4.0%-4.1% after adjusting for
the tenor.
Pricing on the new bonds will reset at year
five to the prevailing Singapore dollar SOR
plus the initial re-offer spread of 197.2bp.
There would be a regulatory bail-in prior to
any insolvency or liquidation of the German
bank in the form of either a partial or full
writedown of conversion into shares or other
instruments of ownership.
Settlement of the T2 notes is on
September 18. Commerzbank, DBS, HSBC
and OCBC were joint lead managers and
bookrunners.
KIT YIN BOEY