COUNTRY REPORT SINGAPOREThe indicative price is at a 55% premium to
last Wednesday’s close of Ps5.81. The shares
were down 5% at Ps5.52 last Thursday.
As is usually the case in the Philippines,
the final offer price is likely to be below the
indicative price.
H2O is the second Philippine company
in recent times to announce a follow-on
offer at a premium to the traded price.
Last month, San Miguel Food and Beverage
announced a Ps124bn follow-on offer at
an indicative price of Ps140. The indicative
price is at a 44% premium to last Thursday’s
traded price of Ps97.
H2O Ventures, which is being renamed
PH Resorts Group Holdings, is selling the
shares to fund its casino development
program.
China Banking and CLSA are the
underwriters of the follow-on offer.
SINGAPORE
DEBT CAPITAL MARKETS
› UOB MAKES EURO COVERED RETURN
UNITED OVERSEAS BANK last Monday returned to
the offshore covered bond market, locking
in tight pricing for a €500m (US$580m) five-
year offering.
The bond priced at 99.52 with a coupon
of 0.25%, yielding 0.347% or mid-swaps plus
7bp. Pricing tightened from guidance of
10bp area, and market sources estimated
that the final spread gave a 4bp new issue
concession, tight in the context of recent
euro covered deals.
The bonds, backed by Singapore dollar
residential mortgage loans and compliant
with the standards for the ECBC covered
bond label, are expected to be rated Aaa/DBS adds to Singapore bond rebound
Bonds AT1 issue attracts S$3bn book despite tight pricingDBS GROUP HOLDINGS last week sold S$1bn
(US$732.6m) of Additional Tier 1 capital,
adding to a rebound in the flagging
Singapore dollar bond market after a
slowdown in issuance has left investors
hungry for big-name credits.
Bond sales in the city state slumped
40% in the first six months of 2018 but
have shown signs of life in the past six
weeks, particularly since OCBC Bank
reopened the AT1 market in August with
a S$1bn 4% perpetual that drew a chunky
S$3bn book. The deal pulled private bank
investors back to the debt market from
alternative assets in the equity and US
dollar bond markets.
“Private bank clients are roughly looking
for yields with a 4% handle but they are still
particular about credits,” said a syndicate
banker. “Local bank names such as DBS and
OCBC provide the brand they want and the
banks’ high-risk AT1 instruments provide the
yield they seek.”In addition, credit analysts say there is
pent-up demand in a market flush with
cash following recent Tier 1 redemptions.
These include DBS’ S$1.5bn 7.5% perpetual
redeemed on June 15, United Overseas
Bank’s S$850m perpetual called on July 23,
and Malayan Banking’s S$600m perpetual
called on August 11. More funds will be
available from September 20 when OCBC
redeems its S$1.5bn 5.1% perpetual note.
DBS Group, rated Aa2/AA– (Moody’s/
Fitch), priced the perpetual non-call seven
capital at par to yield 3.98% with a spread of
165bp over Singapore dollar SOR.
The pricing compared with OCBC’s 4%
perpNC5 notes, which were quoted at 3.71%
on Wednesday, for an extension of two years,
showing DBS managed to price without a
new issue concession, said the banker.
Despite the tight pricing, the offering still
drew a final book of over S$3bn from 119
accounts, showing an attrition from S$4bn
at initial guidance of 4.375% area. Privatebank investors put in strong bids, buying 49%
of the deal, followed by insurance and fund
managers who bought 43%. Agency, bank
and corporate investors took the remaining
8%. Singapore accounted for 94% of the
issue.
The DBS bonds were trading at
100.45/100.50 on Thursday.
The unsecured subordinated notes, to
be rated Baa1/BBB by Moody’s/Fitch, will
reset in year seven to the prevailing SOR
plus and the initial credit spread. The notes
are deferrable and cancellable, as well
as non-cumulative. A permanent partial
or full write-off will occur upon a trigger
event, which would happen if the Monetary
Authority of Singapore decides a write-off or
a public sector capital injection is needed.
DBS Bank was sole lead manager
and bookrunner and Bank of China, CCB
Singapore and ICBC Singapore were co-
managers.
KIT YIN BOEYTop bookrunners of all Singapore dollar bonds
1/1/18 – 31/8/18
Amount
Name Issues S$(m) %
1 DBS 31 4,427.5 35.0
2 OCBC 24 3,551.3 28.1
3 UOB 9 1,595.4 12.6
4 Standard Chartered 9 1,176.9 9.3
5 HSBC 7 619.1 4.9
6 Credit Suisse 5 545.7 4.3
7 CIMB Group 2 268.8 2.1
8 Maybank 1 140.0 1.1
9* SMFG 1 82.4 0.7
9* Citigroup 1 82.4 0.7
Total 46 12,651.2
*Market volume
Proportional credit
Source: Thomson Reuters SDC Code: AS12Top bookrunners of all Singapore dollar bonds
(non-domestic)
1/1/18 – 31/8/18
Amount
Name Issues S$(m) %
1 DBS 2 440.0 51.8
2 OCBC 3 290.0 34.1
3* UOB 1 40.0 4.7
3* Standard Chartered 1 40.0 4.7
3* Credit Suisse 1 40.0 4.7
Total 4 850.0
*Market volume
Proportional credit
Source: Thomson Reuters SDC Code: AS14Top bookrunners of all Singapore dollar
bonds (domestic)
1/1/18 – 31/8/18
Amount
Name Issues S$(m) %
1 DBS 29 3,987.5 33.8
2 OCBC 21 3,261.3 27.6
3 UOB 8 1,555.4 13.2
4 Standard Chartered 8 1,136.9 9.6
5 HSBC 7 619.1 5.3
6 Credit Suisse 4 505.7 4.3
7 CIMB Group 2 268.8 2.3
8 Maybank 1 140.0 1.2
9* SMFG 1 82.4 0.7
9* Citigroup 1 82.4 0.7
Total 42 11,801.2
*Market volume
Proportional credit
Source: Thomson Reuters SDC Code: AS15