- The full allocation was given to all candidates who applied for S$13,000 or less (44 percent of applicants).
- Applicants that filed for less than S$50,000 received more than half of the Final Public Offer Size (76 percent of applicants)
- On Thursday, November 25, 2021, bonds are slated to begin trading on the SGX-ST at 9 a.m.
Temasek Holdings (Private) Limited (âTemasekâ) refers to the announcement dated 15 November 2021 regarding the offer of the 5-year T2026-S$ Temasek Bond, which will be issued through its wholly-owned subsidiary Temasek Financial (IV) Private Limited (the âIssuerâ) and will consist of up to S$350 million 1.8 percent guaranteed notes due 2026 (subject to the Upsize Option).
If the Public Offer and/or Placement are oversubscribed, the Issuer and Temasek may exercise the Upsize Option to increase the Total Offering up to S$500 million and determine the final allocation between the Public Offer and Placement, subject to compliance with the Allocation Condition, as stated in the announcement dated 15 November 2021.
The Issuer and Temasek have decided to exercise the Upsize Option to expand the Public Offer Size by S$150 million due to strong demand from retail investors. This is to ensure that all qualifying Public Offer submissions receive some funding.
As a result, the T2026-S$ Temasek Bond’s aggregate principal amount of S$500 million under the Total Offering has been allocated as follows:
(b) Bonds with a total principal amount of S$250 million will be offered in the final public offering.
Based on the Final Placement Size of S$250 million, the S$1,542,500,000 in bids received under the Placement represent a subscription rate of nearly 6.2 times.
Valid applications submitted at the closing of the Public Offer totaled S$649,506,000, according to the notification dated November 22, 2021. Valid applications received under the Public Offer should instead total S$649,368,000 after further verification. This is around 2.6 times the Final Public Offer Size of S$250 million, or 6.5 times the initial Public Offer Size of S$100 million.
All applicants who submitted legitimate applications during the Public Offer were given all or a portion of the bonds they requested.
Any applicant whose Public Offer bond application was invalid or who did not get the full allocation for which they applied would have their application amounts or balance (as applicable, excluding any non-refundable application or administrative charge) repaid without interest. This will be accomplished by crediting his or her bank account with DBS, POSB, OCBC, or UOB within 24 hours of the Public Offer bonds being allocated.
Appendix A shows the allocation outcomes of the Public Offer and the Placement.
On Wednesday, November 24, 2021, the T2026-S$ Temasek Bond is likely to be released.
From Wednesday, November 24, 2021, retail investors can verify their allocations by entering into their CDP accounts.
The T2026-S$ Temasek Bond is expected to begin trading on the SGX-ST Main Board at 9 a.m. on Thursday, November 25, 2021, assuming the SGX-ST is satisfied that all conditions for the start of trading in the bonds have been met.
Temasek 1.8 percent 261124XB# will be the trading name for the T2026-S$ Temasek Bond, which will be traded on the SGX-Main ST’s Board.
This release does not constitute an offer to sell securities in the United States. The Securities Act of 1933, as amended, prohibits the offering or sale of securities in the United States without registration or an exemption from registration. There is no part of the planned offering that will be registered in the United States, and no offering will be undertaken in the United States. The T2026-S$ Temasek Bond may not be offered or sold in the United States, or to, or for the account or benefit of, residents of the United States.
This announcement is solely addressed at people who are âqualified investorsâ within the sense of Article 2(e) of the Prospectus Regulation (EU 2017/1129) as amended (the âProspectus Regulationâ) in the European Economic Area (the âEEAâ).
This announcement is only directed at âqualified investorsâ in the United Kingdom (âUKâ), as defined by Article 2(e) of the Prospectus Regulation, which is part of domestic law in the UK by virtue of the European Union (Withdrawal) Act 2018, as amended, who are also persons I who have professional experience in matters relating to investments as defined by Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. This announcement should not be acted upon or relied upon by non-relevant individuals. Any investment or investment activity mentioned in this announcement is only available to relevant people and will only be done with relevant people.
There is no key information document for PRIIPs or the United Kingdom. Because the offering is not available to retail investors in the EEA or the UK, a PRIIPs essential information sheet has been developed.
The following is the breakdown of successful applicants for the S$250 million Placement:
What is the procedure for purchasing a Temasek bond?
Temasek Holdings (Private) Limited (âTemasekâ), through its wholly-owned subsidiary Temasek Financial (IV) Private Limited (the âIssuerâ), is selling a Temasek Bond with a Public Offer to retail investors in Singapore on November 15, 2021, at 7.15 p.m.
Temasek shall unconditionally and irreversibly guarantee the T2026-S$ Temasek Bond, which consists of 1.8 percent fixed rate guaranteed notes due 2026 sold under the Issuer’s S$5 billion Guaranteed Medium Term Note Programme (the âProgrammeâ).
The T2026-S$ Temasek Bond’s planned Total Offering of up to S$350 million consists of:
(a) the issuance of S$250 million in bonds to institutional, accredited, and other specified investors; and (b) the issuance of S$250 million in bonds to institutional, accredited, and other specified investors.
b) A public offering of up to S$100 million in bonds to Singapore retail investors.
An Upsize Option, the Allocation Condition, and the Re-allocation all apply to the proposed Total Offering. More information will be provided later in this announcement.
The Issuer will provide Temasek and its investment holding entities with the net funds from the Total Offering to support their normal operations.
The T2026-S$ Temasek Bond has a tenor of five years from the scheduled Issue Date of November 24, 2021, and pays a fixed Interest Rate of 1.8 percent per annum, payable at the end of every six month period. CDP will be used to clear the bonds.
The Temasek Bond T2026-S$ will be issued in $1,000 denominations. The T2026-S$ Temasek Bond has a S$1,000 issue price.
The Offering Circular for the Programme dated 19 July 2021 and the Pricing Supplement in connection to the T2026-S$ Temasek Bond dated 15 November 2021, both announced on SGXNET on 15 November 2021, contain full information of the Total Offering and the T2026-S$ Temasek Bond.
The T2026-S$ Temasek Bond cannot be purchased with CPF or SRS funds in the Public Offer and Placement.
After the Total Offering is completed and the bonds are listed on the SGX-ST, investors with SRS accounts should consult their stockbrokers and the relevant banks in which they hold their SRS accounts if they intend to purchase the bonds from the market using SRS funds.
Under the Public Offer, applications must be in multiples of S$1,000, with a minimum subscription of S$1,000.
To apply for this bond, retail investors in Singapore will require their own CDP account.
- If an applicant submits more than one application under the Public Offer, all of the applicants’ applications will be rejected.
- Investors that applied through the Placement may only make ONE application through the Public Offer.
Applications for the Public Offer must be made in Singapore and must be paid in full right away.
If the T2026-S$ Temasek Bond is oversubscribed, Temasek plans to allocate it to as many retail investors as possible, similar to how the T2023-S$ Temasek Bond was allocated in 2018.
Before deciding on the final allocation strategy, Temasek will consider investor demand from the submissions submitted. If the total number of subscriptions received exceeds the number of subscriptions available under the Public Offer, an allocation method will be used.
If an applicant is unsuccessful in the Public Offer, in whole or in part, for any reason, the failed portion of the application fee will be reimbursed without interest.
âTerms, Conditions, and Procedures for Application and Acceptanceâ in Appendix B of the Pricing Supplement contains more information.
Institutional, Accredited, and Other Specified Investors in Placement Application and Payment Procedures
Under the Placement, applications must be in multiples of S$250,000, with a minimum subscription of S$250,000.
Unless the Issuer, Temasek, and the Joint Lead Managers and Bookrunners agree otherwise, applications under the Placement must be paid in full on or before the Issue Date. Applications may be sent directly to the Joint Lead Managers and Bookrunners or through the relevant private bank, broker, or securities firm, which will define the mode and method of submission at their discretion.
Without assigning any reason, the Issuer, Temasek, and the Joint Lead Managers and Bookrunners reserve the right to refuse or accept any application in whole or in part, or to scale down, poll, or allocate any application. This right is applicable to all bond applications.
Anyone interested in subscribing to the Public Offer or the Placement should read the Offering Circular and the Pricing Supplement carefully before proceeding. Applications must be submitted according to the procedures outlined in the Pricing Supplement.
The Product Highlights Sheet for the T2026-S$ Temasek Bond dated 15 November 2021 should also be read by retail investors.
In the event that the Public Offer and/or Placement are oversubscribed, the Issuer and Temasek may exercise an Upsize Option to increase the Total Offering up to S$500 million. The Issuer and Temasek will decide on the ultimate allocation between the Public Offer and the Placement (including any Re-allocation), subject to the Allocation Condition being met.
The Issuer is not required to issue any T2026-S$ Temasek Bonds unless at least 20% of the bonds are sold to institutional investors and other relevant parties. This 20% minimum allocation requirement is imposed by law, and it must apply to all bonds issued or to be issued to the Joint Lead Managers and Bookrunners for their own accounts; and
The Issuer and Temasek may reassign the principal amount of the T2026-S$ Temasek Bond between the Public Offer and the Placement at their discretion.
Moody’s has assigned Temasek an overall corporate credit rating of âAaaâ and S&P has assigned it a âAAAâ. The bonds are rated âAaaâ by Moody’s and âAAAâ by Standard & Poor’s. A credit rating does not imply that you should buy, sell, or hold the bonds. The credit ratings are not designed for use by individual investors, and retail investors should not base their investment decisions on them. Before making any decisions based on credit ratings, all investors should consult with their professional advisors.
DBS Bank Ltd. is the Global Coordinator, and DBS Bank Ltd., Oversea-Chinese Banking Corporation Limited, United Overseas Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, and Standard Chartered Bank (Singapore) Limited are the Joint Lead Managers and Bookrunners for the Total Offering.
When it comes to altering the timeline, accepting or rejecting any application, or exercising the Upsize Option and/or the Re-allocation, the Issuer and Temasek may consult the Joint Lead Managers and Bookrunners.
The Issuer anticipates allocating the first bonds under the Placement to institutional, accredited, and other designated investors on or around November 15, 2021. Following the initial allocation of bonds, the Issuer may (but is not obligated to) allocate bonds under the Placement from time to time until the Placement’s offering period expires.
The retail public offer is scheduled to begin at 9 a.m. on November 16, 2021, and end at 12 p.m. on November 22, 2021.
Prospective investors should take note of the significant dates and times listed below in the Expected Timetable for the main events in the Total Offering:
The Expected Timetable is simply a guideline and may change. All dates and hours mentioned above are in Singapore time.
The SGX-ST gave in-principle permission for the listing and quotation of the T2026-S$ Temasek Bond on the SGX-Main ST’s Board on October 26, 2021, subject to certain restrictions. Such approval should not be interpreted as a recommendation for the Issuer, Temasek, their respective subsidiaries (if any), associates (if any), the Programme, or the bonds. On November 25, 2021, the T2026-S$ Temasek Bond is planned to be listed on the SGX-Main ST’s Board. Each board lot of the T2026-S$ Temasek Bond will consist of S$1,000 in principal amount for purposes of trading on the SGX-Main ST’s Board.
The listing approval is conditional on adequate disclosure of all risks and material information in the Offering Circular, Pricing Supplement, and, where applicable, the Product Highlights Sheet in respect of the bonds, in order for investors to make an informed investment decision on the bonds, and it is also conditional on the following:
I to adhere to all applicable listing rules and standards, as they may be amended from time to time;
(ii) that the SGX-ST has sole discretion over the listing and quotation of the bonds. It may be removed from the SGX-Main ST’s Board’s Official List at any time, or the bonds may be stopped or removed from listing or quotation without the SGX-ST providing a cause;
(ii) that the SGX-ST may modify or waive the listing rules at its discretion;
(b) in regard to the offering of the bonds, the material information contained in the Offering Circular, Pricing Supplement, and, if applicable, the Product Highlights Sheet is the current and updated version;
(d) Before being listed, a copy of the signed subscription agreement, agent bank agreement, fiscal and agency agreement, and trust deed must be supplied.
(e) a copy of any document, such as a deed poll, that may be relevant to the offering of debt securities will be supplied prior to listing, as required by Rule 314 of the Listing Manual;
(f) the amount of bonds issued to institutional investors and relevant individuals (as defined in Singapore’s Securities and Futures Act, Chapter 289), excluding any bonds issued to the lead manager, arranger, and underwriter for their own accounts, is at least 20% of the total amount of bonds issued;
(g) for the issue of the bonds, the exemption criteria in the Securities and Futures (Offers of Investments) (Exemption for Offers of Straight Debentures) Regulations 2016 have been met;
(h) the Trustee is appointed in accordance with Rule 308(3) of the Listing Manual;
I the Issuer has no interest in or relationship with the Trustee that could conflict with the Trustee’s position as trustee; and (ii) the Issuer has no interest in or relationship with the Trustee that could conflict with the Trustee’s role as trustee.
(j) that the trust deed governing the bond issue conforms with the Listing Manual’s Rule 308(5) standards.
Is it possible to purchase Temasek bonds?
Yes, the T2026-S$ Temasek Bond will be available for purchase or sale in the market once it is listed and quoted on the SGX-ST Main Board on Thursday, November 25, 2021, at 9 a.m.
Each board lot of the T2026-S$ Temasek Bond will have a principal amount of S$1,000 for trading purposes.
Dealings in the T2026-S$ Temasek Bond shall be conducted in Singapore Dollars, and will be settled through the CDP on a scripless basis in each transaction.
On the Debt Securities Clearing and Settlement System, the T2026-S$ Temasek Bond can also be traded over-the-counter.
The T2026-S$ Temasek Bond’s market price may be higher or lower than its issue price, depending on market conditions at the time, such as supply and demand, general market conditions, interest rates, and other variables.
How can I purchase bonds on the Singapore Exchange?
Your securities broker can trade your SGS bonds on the SGX if they are kept in your CDP or SRS account. SGS bonds can also be purchased on the SGX with cash or SRS funds. Transaction and brokerage fees apply when trading on the SGX. 9 a.m. to 5 p.m., with a break between 12 and 1 p.m.
How do I purchase SGS?
Cash, Supplementary Retirement Scheme (SRS) funds, or CPF Investment Scheme (CPFIS) funds can all be used to purchase SGS bonds and T-bills. Your type of application will determine what you’ll need and how you’ll apply. You’ll need a bank account with one of the three local banks (DBS/POSB, OCBC, or UOB) to apply for cash.
When Temasek bonds mature, what happens?
Unless the T2023-S$ Temasek Bond has been redeemed and cancelled, or purchased and cancelled by the Issuer, each bondholder will receive the principal amount plus the last interest payment on the maturity date (Wednesday, October 25, 2023).
On the fifth (5th) business day before the interest payment date, interest will be paid to the registered holder of the T2023-S$ Temasek Bond (record date). The record date for the first interest payment on April 25, 2019, for example, is April 17, 2019. (19 April 2019 is a public holiday in Singapore). You will not be entitled to receive the interest payment on the interest payment date if you purchase the T2023-S$ Temasek Bond after the record date but before the interest payment date.
(* A business day is a day that is not a Saturday, Sunday, or public holiday in Singapore when banks and foreign exchange markets are open for business.)
Is it wise to invest in retail bonds?
In the previous post, I mentioned money market accounts, which are either bank money market accounts or unit trust money market funds with current returns of roughly 4.4 percent and no fixed term. These funds or accounts are connected to the repo rate and track the repo rate’s upward and downward swings. Bank money market accounts offer a variable rate of return based on the amount invested, but unit trust-based money market funds offer a fixed unit price regardless of the amount deposited.
Fixed deposits were left out because their yields vary greatly depending on the term and the institution.
Cash, in any form, is not a good long-term investment, especially if you are under 65, because interest generated is taxed.
The only time cash in the form of a money market or fixed deposit account makes sense is if the investor is tax-exempt or if the funds are being saved for a purchase within the next two years.
Interest-bearing investments can be justified when money are invested in a special trust for a minor child, a special needs individual, or an NGO because these structures are tax-free. In the trust deeds of such vehicles, these types of investments are frequently designated as the prescribed investment of choice.
You enter the ‘growth’ space of the financial environment whenever you contemplate investment periods of longer than five years.
A 35-year-old with more than 20 years till retirement should, in my opinion, concentrate on high-growth assets such as shares and commercial real estate, as well as a healthy offshore exposure.
Retail bonds are a wonderful option for retirees who want income and are eligible for additional tax benefits. Retail bonds are taxed in the same way as cash and fixed deposits are taxed. Under the current circumstances, I would be hesitant to invest in a fixed five-year retail bond. The repo rate was recently hiked by 0.25 percent and is expected to continue to rise in the near future, making the 8% retail bond unappealing.
Depending on inflation, interest rates could easily approach and surpass a prime rate of 10% in the following two to three years. The inflation linker puts you ahead of inflation, but depending on your tax rate, the margin shrinks. If your tax rate is 30%, the yield on an inflation plus 4% retail bond drops to 6.3 percent in total if inflation is 5% (5 percent + 4% = 9 percent – 30% tax rate = 6.3 percent).
A 10-year retail bond with an interest rate of 8% is the same. If you are taxed at 30%, your return will be cut to 5.6 percent. The only difference is that you’re now locked in for ten years at a time when interest rates are expected to rise to normal levels. Remember that before Covid, the typical money market rate was around 10% per year.
When you’re retired, retail bonds make sense. Because they are backed by the government, they are a secure investment with a reasonable return (tax depending). However, I would not recommend investing in retail bonds as a means of securing future retirement income.
Given your age and depending on your investment horizon, you should aim for returns above inflation + 6% net (after-tax) as a retirement provisioning investment objective. After taxes, no cash or interest-bearing investment will provide that consistently.
If you’re a growth fund skeptic, consider income funds and low-equity multi-asset funds. Consider why it is so crucial to have a healthy proportion of exposure to growing assets locally and offshore while investing for retirement in the essay ‘Investments: Beware of the Cost of Conservatism’ that you referred to.
The lower your rate of return, the more money you’ll need to save to reach your retirement objective.
For instance, if you require R125 000 a month in 25 years (the equivalent of around R37 000 now with 5% inflation), you will require approximately R37 million. Assuming you have R1.5 million (the aim you should have at age 35 if you earn R37 000 per month and want to retire at age 60) so far and plan to retire at 60, you will need to make the following monthly contribution to attain your goal:
- Future value of current provision at 8% return = R10.2 million (shortfall = R26.8 million)
- Future value of current provision at 12% return = R25.5 million (shortfall = R11.5 million)
The numbers are self-evident. However, don’t be alarmed by the numbers. In actuality, you’ll start little and gradually increase your payments as your income rises. I just used a level contribution calculation to emphasize the need of decent returns and the consequences of being overly conservative.
What exactly is an Astrea bond?
Make a Future Investment. The Astrea V PE Bonds are Singapore’s second listed retail bond backed by private equity fund cash flows. They were the sixth series on the Astrea Platform, and they represented another step toward Azalea’s goal of connecting individual investors to private equity.