Green SGS (Infrastructure) Bonds

[Arandalo]

LAUNCH OF THE NEW 30Y GREEN SINGAPORE GOVERNMENT SECURITIES (SGS) (INFRASTRUCTURE) (JUN-54)

The Monetary Authority of Singapore (“MAS”) today announced that S$2.5 billion of the new 30-year Green SGS (Infrastructure) NA24300E (the “Jun-54 bond”) was priced at 3.30%. S$2.45 billion of the Jun-54 bond was placed with institutional and accredited investors. The remaining S$50 million of the Jun-54 bond will be offered to individual investors from 9:00a.m. on 23 May 2024 to 12:00 noon on 27 May 2024.

Proceeds from the Jun-54 bond will be used to finance expenditures in support of the Singapore Green Plan 2030, including the Jurong Region Line and Cross Island Line, to build green infrastructure for a financially and environmentally sustainable future.

Placement to institutional investors
The yield of 3.30% represented a tightening of -16 basis points from the initial price guidance at the start of the book-building. The placement size of S$2.45 billion was at the top end of the targeted issuance size, backed by a combined placement orderbook of about S$6.0 billion (2.45 times the size of the amount offered under the placement). A diverse mix of high quality institutions invested in the Jun-54 bond. Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. (DBS), The Hongkong and Shanghai Banking Corporation Limited Singapore Branch, Standard Chartered Bank (Singapore) Limited, and United Overseas Bank Limited (UOB) were the bookrunners for the transaction.

Public Offer to individual investors
The Jun-54 bond will be open for applications from individual investors from 9:00a.m. on 23 May 2024 to 12:00 noon on 27 May 2024. S$50 million of the Jun-54 bond will be offered to the public. The effective yield will be 3.30%, as determined through the institutional book-building process. This entails a price of S$99.053 per S$100 in principal value, based on the Jun-54 bond’s coupon rate of 3.25% per annum.

Individual investors who wish to subscribe to the Jun-54 bond should review the product details carefully, and assess whether the risk/returns and characteristics of longtenor bonds meet their financial needs. Investments in SGS, including the Jun-54 bond, bear market risk. If investors sell the bond before its maturity date, they may receive less, or more, than their original investment, as the market price of the bond may rise or fall with changing market conditions.

All applications for the Public Offer should be made using the Electronic Securities Application (ESA) or Initial Public Offer (IPO) Application, which is available via the application channels of DBS (including POSB), Oversea-Chinese Banking Corporation Limited (OCBC), and UOB. As the application process differs from that of SGS issued via auctions, investors should familiarise themselves with the application instructions before making their applications. This includes taking note of the following key features:

• Each application unit represents S$100 in principal amount of the bonds and has a settlement price of S$99.053.
• Each application must be made in respect of a minimum of 10 application units or in multiples of 10 application units (10 application units representing S$1,000 in principal amount of the bonds and with a settlement price of S$990.53).
• Only one application per individual (across all banks) will be accepted. Multiple applications will be rejected.
• In the event of over-subscription, MAS will seek to allocate the bonds to as many individuals as possible, taking into account the distribution of applications.

Please refer to the Product Fact Sheet on the application process for the Public Offer of the Jun-54 bond. For further queries relating to the application process, please refer to the hotline numbers below.

Hotline numbers:

• DBS: 1800-111-1111
• POSB: 1800-339-6666
• OCBC: 1800-363-3333
• UOB: 1800-222-2121
• CDP: 6535-7511

https://www.mas.gov.sg/-/media/mas/...the-new-30y-green-sgsinfrastructure-jun54.pdf


Key Details

SGS Type	Green SGS (Infrastructure)
Issue Code	NA24300E (New)
ISIN Code	SGXPK17B11U8 Note: This is a provisional ISIN code which is provided solely on a provisional basis and is not deemed active nor official record until activated by the SGX-ST.
Issue Date	03 Jun 2024
Maturity Date	01 Jun 2054
Total Amount Offered	S$2,500,000,000
MAS' Intended Application Amount	Nil.
Price of New Issue	S$99.053 per S$100 of principal amount of the Bonds
Yield of New Issue	3.30% p.a.
Coupon Rate	3.25% p.a.
Coupon Payment Dates	01 Dec and 01 Jun
Minimum Denomination	S$1,000

Application Timeline for Public Offer (Retail)

1. Expected Opening Date​

   23 May 2024, 9am

2. Expected Closing Date​

   27 May 2024, 12pm

3. Expected Allotment Date​

   28 May 2024, afternoon

4. Expected Issuance Date​

   03 Jun 2024

https://www.mas.gov.sg/bonds-and-bi...ation-green-sgs-infrastructure-bonds-na24300e

 

[maumu]

... so it's like a 3.25% p.a. fixed deposit for 30 years?

 

[reddevil0728]

... so it's like a 3.25% p.a. fixed deposit for 30 years?

This one is coupon paying.

 

[lzydata]

Cash only, CPF and SRS funds cannot be used.

 

[CaptainWu]

Probably not consider as 30 years is far too long, not sure how popular with the secondary market as likely need to sell before expiry.

 

[DevilPlate]

good deal for our garmen

 

[sohguanh]

I remember long time ago there is a 50 years bond? Wow now come out 30 years. What make govt think reduce to 30 years still will attract investor interest to invest at all? I for one will not. SSB at 10 years I think just nice. Beyond that hmmmm that is for me of cuz

 

[reddevil0728]

I remember long time ago there is a 50 years bond? Wow now come out 30 years. What make govt think reduce to 30 years still will attract investor interest to invest at all? I for one will not. SSB at 10 years I think just nice. Beyond that hmmmm that is for me of cuz

SGS got multiple tenures to cater for different time horizon. so it's normal

 

[YorYor]

Price of New Issue

S$99.053 per S$100 of principal amount of the Bonds

So does this mean that it works like T-bills where you actually pay $99.053 per unit and get back $100 per unit at the end of 30 years?
I suppose if I set my CDP linked account to a joint account, I could theoretically leave this bond without transferring out in the (very likely) event the bond outlives me?

 

[lzydata]

Price of New Issue

S$99.053 per S$100 of principal amount of the Bonds

So does this mean that it works like T-bills where you actually pay $99.053 per unit and get back $100 per unit at the end of 30 years?
I suppose if I set my CDP linked account to a joint account, I could theoretically leave this bond without transferring out in the (very likely) event the bond outlives me?

Only individual CDP accounts allowed, not joint ones, so sadly this won't work.

 

[lzydata]

I remember long time ago there is a 50 years bond? Wow now come out 30 years. What make govt think reduce to 30 years still will attract investor interest to invest at all? I for one will not. SSB at 10 years I think just nice. Beyond that hmmmm that is for me of cuz

Such long term bonds are more for institutional investors that have their particular needs, such as insurance companies with very long liabilities.

It's already reported that there is an order book of 2.45 times the amount offered to institutional investors.

https://www.businesstimes.com.sg/co...2-5-billion-30-year-sovereign-green-bonds-3-3

The placement for institutional investors is $2.45b out of the $2.5b. Only $50m is under the public offer. MAS can re-allocate between the placement and public offerings.

So (1) there is no lack of demand for these long term bonds, and (2) you or I are not the target audience anyway.

 

[sohguanh]

Such long term bonds are more for institutional investors that have their particular needs, such as insurance companies with very long liabilities.

It's already reported that there is an order book of 2.45 times the amount offered to institutional investors.

https://www.businesstimes.com.sg/co...2-5-billion-30-year-sovereign-green-bonds-3-3

The placement for institutional investors is $2.45b out of the $2.5b. Only $50m is under the public offer. MAS can re-allocate between the placement and public offerings.

So (1) there is no lack of demand for these long term bonds, and (2) you or I are not the target audience anyway.

If that is the case why even offer to retail in the first place? Create more admin paper work only or they want to project to ppl govt is fair give institutions also give retail then yes that is correct move to soothe the feelings of retail.

 

[reddevil0728]

If that is the case why even offer to retail in the first place? Create more admin paper work only or they want to project to ppl govt is fair give institutions also give retail then yes that is correct move to soothe the feelings of retail.

difficult to be government regardless of party when always got such cases of people criticising when they don't open to retailers. and also people criticising when they open to retailers.

Whether that creates admin paper work or not, retailers don't have to care what.

 

[YorYor]

Only individual CDP accounts allowed, not joint ones, so sadly this won't work.

Sorry, I meant the linked bank account for DCS, not the CDP account itself.

 

[YorYor]

So considering the coupon rate is so close to the current SSB, the only differences are the extra 20 years and that it's not redeemable?
In order to make money from selling the bond, it will require prevailing interest rates to be much lower than the 3.25% right, and assuming someone else happens to be interested?
Not sure if it's worth the liquidity trade-off just to double the invested amount over 30 years...

 

[fr33d0m]

T-Bill, to certain extent, SGS all should follow this mode of auction.

Let institutional investors decide the yield and retail investors can just get the scraps at the same yield, then the yield will be more market-based, rather than current yield significantly driven by people who have little idea of competitive bidding.

However, I guess, MAS/government will not prefer this as they would like the retails to drive down the yield than actual competitive yield.

T-Bill has long lost its position to the institutions.

 

[reddevil0728]

T-Bill, to certain extent, SGS all should follow this mode of auction.

Let institutional investors decide the yield and retail investors can just get the scraps at the same yield, then the yield will be more market-based, rather than current yield significantly driven by people who have little idea of competitive bidding.

However, I guess, MAS/government will not prefer this as they would like the retails to drive down the yield than actual competitive yield.

T-Bill has long lost its position to the institutions.

US-T, US residents/citizens who are retail investors can’t bid?

 

[homedriver]

Means lock for 30 years? No way to redeem before mature?

 

[maumu]

I think can sell on secondary market, but not sure if it's easy to sell (got buyer or not).

imo, 3.25% coupon is pretty good for 30 years. stable and long payout.

 

[lzydata]

Means lock for 30 years? No way to redeem before mature?

No, there are 2 ways to sell SGS bonds on the secondary market: either on SGX or through the primary dealers DBS, UOB or OCBC. It is just that the price may not be the best as the market is quite illiquid.

https://www.mas.gov.sg/bonds-and-bi...bills-on-the-secondary-market-for-individuals