SINGAPORE: Singapore’s offering of sovereign green bonds using a 50-year tenor continues to be priced at a yield of 3. ’04 per cent after seeing “strong” demand through institutional investors, mentioned the Monetary Expert of Singapore (MAS) on Thursday (Aug 4).
The S$2. four billion bonds, the Green Singapore Authorities Securities (Infrastructure) or Green SGS (Infra), mark the country’s 1st issuance of lasting debt .
With a maturity time in 2072, this really is also the first 50-year bond issued by Singapore Government.
The bonds’ cost and yield had been announced following a day-long book building process.
So-called “books” are built by banking institutions, or the appointed book runners, as they consume orders. The book runners for this had been DBS Bank, Krauts (umgangssprachlich) Bank, HSBC, OCBC Bank and Regular Chartered Bank.
About S$2. thirty-five billion of the Singapore-dollar-denominated bonds were placed with institutional plus accredited investors by the end of Thursday – marking the top finish of the targeted issuance size.
CONTUDO said the book-building process saw “strong investor demand”, because seen from a combined placement order guide of more than S$5. three or more billion, or 2 . 26 times the dimensions of the amount offered under the placement.
The yield of 3 or more. 04 per cent also represented a “significant tightening of -11 basis points in the initial price guidance at the start of the guide building”.
PORÉM added that the provides were placed with “a diverse mix of high-quality institutions”.
Experts who spoke to CNA previously Thursday had expected solid interest from institutional investors .
“Proceeds is going to be used for green projects and based on previous data trends, produces on government-issued Singapore Government Securities bonds are high-quality. Additionally, the green bonds are backed by Government and without a maximum investment amount, ” said Ms Cherine Fok, director of sustainability providers at KPMG Singapore.
MAS deputy managing director just for markets and development Leong Sing Chiong said the solid order book “affirms investors’ confidence” in the Government’s plans to construct green infrastructure for any financially and environmentally-sustainable future.
The extension of the sovereign produce curve to fifty years will also more develop the Singapore-dollar bond market and support longer-tenor business issuances, he added in the press release.
S$50 MILLION PUT UP FOR PUBLIC PROVIDE
The remaining S$50 million of the eco-friendly bonds will be agreed to individual investors, who can start applying from 9am on August 5 to noon on Aug 10.
The produce of 3. 04 per cent entails a coupon rate of 3 per cent per annum and a price of S$98. 976 per S$100 in principal value.
MAS said it “retains the discretion to offer any unallocated bonds from your public offer to institutional investors”.
In its press release, the central bank advised retail investors to examine the bond product’s details carefully and assess whether the risk returns and features of long-tenor provides meet their monetary needs.
This added that all purchases in Singapore Govt Securities “bear marketplace risk”.
“If investors sell the particular bond before the maturity date, they might receive less, or even more, than their initial investment, as the selling price of the bond might rise or fall with altering market conditions, ” it said.