Temasek, the Singapore government-linked investment company, is selling S$200 million of 5-year bonds in its first public bond offering for retail investors. Rated Aaa by Moody’s and AAA by S&P, in line with the credit ratings of Temasek, the T2023-S$ bond is to be issued under Temasek’s $5 billion Guaranteed Medium Term Note Programme. The bonds will carry a fixed interest rate of 2.7%, about 38 bps over the 5-year Singapore government bond, which is trading at about 2.32%. As such, some expect the offer to be strongly subscribed, with the potential that its size could be increased to $500 million due to oversubscription.

The net proceeds from the total offering, which includes a S$200 million tranche placed to institutional and accredited investors, will be used for the investment firm’s business operations. Temasek chief financial officer Leong Wai Leng said that the retail tranche increases their “funding flexibility” and “…helps Temasek to broaden its stakeholder base and provide Singapore retail investors the opportunity to participate in another retail product”.

The bonds will be issued at a price of S$1,000 and in denominations of S$1,000 to retail investors. Individuals can apply to subscribe via ATMs and use up to 35% of their investible CPF savings in their CPF Ordinary Account to apply for the bonds under the public offer or to buy later on the market. Allocations will be subject to balloting if demand exceeds the amount issued. The public offer closes at noon on Oct 23, with the bonds expected to trade on the Singapore Exchange from Oct 26.

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