Temasek prices longest-dated US$1 billion 50-year bond at 2.5%

SINGAPORE (THE BUSINESS TIMES) – Temasek Financial (I) Limited (TFin-I) has issued below par a US$2.75 billion (S$3.76 billion) three-tranche deal of guaranteed bonds, which include a record 50-year tenor.

The wholly-owned subsidiary of Temasek Holdings priced a U$1 billion 50-year bond at 2.5 per cent, a US$1 billion 30.5-year bond at 2.25 per cent and a US$750 million 10-year bond at 1 per cent.

Across the three tranches, there was strong support for the bonds from high-quality institutional, accredited and/or other specified investors globally, said the Singapore state investment firm in a bourse filing on Wednesday (Sept 30).

The 50-year issuance – Temasek’s longest tenor debt yet – was priced at a spread of 110 basis points (bps) over the 30-year benchmark US Treasuries.

Due in 2070, this bond was issued at 99.292 per cent, to give a yield to maturity of 2.525 per cent per annum.

Meanwhile, the 30.5-year bond was priced at a spread of 90 bps over the 30-year benchmark US Treasuries.

Due in 2051, it was issued at 98.368 per cent to give a yield to maturity of 2.325 per cent per annum.

The 10-year bond was priced at a 47.5 bps spread over the 10-year benchmark US Treasures, and issued at 98.821 per cent to give a yield to maturity of 1.125 per cent per annum.

Unconditionally and irrevocably guaranteed by Temasek, the three tranches are the 19th, 20th and 21st bond issues under TFin-I’s US$25 billion guaranteed global medium-term note programme.

The offering was launched on Tuesday.

“Temasek plans proactively for a long dated and well distributed debt maturity profile and avoids large debt repayment obligations in any one year. We assess market conditions and take into account investor feedback along with our own requirements when looking at potential issuances,” a Temasek spokesperson said in response to The Business Times’ queries on the longer debt.

Temasek bonds are issued as public markers of Temasek’s credit quality, helping to increase its funding flexibility and expanding its stakeholder base, the investment firm said on Wednesday.

Temasek has been assigned an overall corporate credit rating of Aaa by Moody’s Investors Service and AAA by S&P Global Ratings.

The three new bonds are each likewise rated Aaa by Moody’s and AAA by S&P.

Temasek and its investment holding companies will use the net proceeds from the issuances to fund their ordinary course of business.

The offering is scheduled to close on Oct 6. The new bonds are then expected to be listed on the Singapore Exchange on Oct 7.

The joint lead managers and bookrunners for the deal were Barclays, Citigroup, DBS, HSBC and Morgan Stanley.

Temasek last sold bonds in November 2019, when TFin-I’s 12-year and 30-year notes, each sized at 500 million euros (S$803.6 million), drew strong demand from investors.

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