First for Singapore as DBS establishes a covered bond programme
(19 June 2015 – Singapore) DBS Bank has announced that it has established a US$10 billion (A$12.9 billion) global covered bond programme, a first for the Singapore market.
Under the programme, DBS will issue covered bonds from time to time.
Covered bonds are rated higher than unsecured debt, often attaining the coveted AAA rating, as investors have recourse to both the issuer and a portfolio of assets. Issuing covered bonds enables banks to reach investors in high-grade securities.
DBS chief financial officer Chng Sok Hui said, “As Singapore’s largest bank and a leading bank in Asia, we are committed to pioneering capital market developments that bring value to both issuers and investors.
“Market participants in Asia and globally are eagerly anticipating the opening of the Singapore covered bond market and we are proud to inaugurate it.”
“For DBS, the programme enables us to engage a fresh group of investors and to access liquidity with greater cost efficiency.
“This will lower our overall funding cost. Subject to market conditions, we look forward to launching our first issue of covered bonds in USD or euro, targeting institutional investors.”
DBS and Barclays are Joint Arrangers of the programme.
DBS, Barclays, Citigroup, Deutsche Bank, J.P. Morgan, Société Générale, and UniCredit Bank have been appointed dealers of the programme.
A global roadshow is being coordinated to introduce the programme to the international investor base.
Net proceeds from the issuance of covered bonds will be used for the general business purposes of the DBS Group.
Approval in-principle has been received from the Singapore Exchange Securities Trading Limited (SGX-ST) for the establishment of the programme and application has been made for permission to deal in and quotation for any covered bonds which are agreed at the time of issue thereof to be so listed on the SGX-ST.
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