All About Temasek Holdings' First Corporate Bond Issue Through Their Subsidiary Temasek Financial (IV) Private Limited
Temasek is offering its first Temasek Bond with a Public Offer to retail investors in Singapore through their wholly-own subsidiary, Temasek Financial (IV) Private Limited.
After hearing that Temasek Holdings had released their first retail private equity bond, Astrea IV. This honestly piqued my interest now that Temasek Holdings have yet again released their first corporate bond issue with a public offer tranche.
Disclaimer: This post was not sponsored! It was shared within our community and we thought we should cover it.
Who is Temasek Financial (IV) Private Limited?
- Temasek Financial (IV) Private Limited is an Investment Holding Company whose principal activity is financing.
- Incorporated with limited liability under the laws of Singapore on 27 August 2015
- Company Registration Number: 201533091K
Temasek offers 2.70% 5-year T2023-S$ Temasek Bond
- This is the first Temasek Bond with retail tranche!
- Previously, Temasek Bonds were only available to institutional, accredited and other specified investors
Total Offering of up to S$400 million for both Placement and Public Offer
- Placement: S$200 million worth of bonds to institutional, accredited and other specified investors; and
- Public Offer: Up to S$200 million worth of bonds to retail investors (like us!) in Singapore
Details on their First Corporate Bond Issue by Temasek Financial (IV) Private Limited
- Interest Yield
- Minimum investment
- Credit Rating of Temasek Financial (IV) Private Limited
Interest Yield for Temasek Bond
- 2.70% per annum payable semi-annually in arrear
For a shorter maturity yield, its interest yield is definitely competitive versus November’s SSB rates at the 5th year at 2.22%. However, the risks that entail each product differs.
Interest Payment Dates:
- 25 April and 25 October in each year till Maturity Date
The maturity of Temasek Bond
- 5 years
- In 2023
Minimum Investment for Temasek Bond
- Min. S$1,000
- Invest in denominations of S$1,000
- Eligible to invest under CPFIS-OA, CPF Investment Scheme with their Ordinary Account
- Supplementary Retirement Scheme (SRS) not supported.
Credit Rating of T2023-S$ Temasek Bond
- “Aaa” by Moody’s Investors Service (Moody’s)
- But it was expected to be rated “AAA” by S&P Global Ratings (S&P)
Credit Rating of Temasek Holdings (Private) Limited
- AAA / Aaa by S&P and Moody’s
Some people might say that they feel 2.70% is a bit too little to be considered returns versus other corporate bonds that they could obtain elsewhere but as rated by Moody’s, it holds the strongest credit rating.
As the saying goes, “high risk, high return”, you may now assume the risk involved in other corporate bonds that offer high returns.
With that, there is no way we are saying that this bond does not involve risks. It does, so please do your own due diligence before committing to it!
Issuer and Guarantor of this Temasek Bond
- Issuer: Temasek Financial (IV) Private Limited
- Guarantor: Temasek Holdings (Private) Limited
Underwriter(s) of the Temasek Bond
- POSB Bank
- DBS Bank Ltd (DBS)
- Oversea-Chinese Banking Corporation Limited (OCBC)
- United Overseas Bank Limited (UOB)
Mode of Application
- Automated teller machines (ATMs)
- Internet banking
- Mobile banking
Expected Timeline of Key Events to Note
|Key Events||Date / Time|
|Opening of Public Offer||Wednesday, 17 October 2018, 9am|
|Closing Date of Public Offer||23 October 2018, 12 noon|
|Closing Date of Placement||23 October 2018, 8pm|
|Date of balloting for Public Offer|
(Only if necessary, for example, in cases of over-subscription)
|24 October 2018|
|Expected announcement of results on both Public Offer and Placement||24 October 2018|
|Issue Date||25 October 2018|
|Expected commencement time of trading of the Notes||26 October 2018, 9am|
Who is this Temasek Bond suitable for?
- You want regular income at a fixed rate
- Want priority in payouts in an insolvency situation
- Understands and knows the risks behind investing in the bond in the event of both the Issuer and Guarantor failing to repay.
If you would like to understand better or get your questions answered, Temasek and SGX Academy are holding seminars to help educate us.