Temasek US$20b bonds: Some questions?

I refer to the article “Temasek to launch 10-year US dollar bond offering” (Straits Times, Jul 26).

It states that “Initial price talk on Temasek Holdings’ offering of 10-year US dollar-denominated bonds is for a yield spread of 90 to 95 basis points over US Treasuries, market sources told the Business Times.

Temasek, a Singapore government-owned investment firm, said on Wednesday (July 25) that the offering is part of a US$20 billion guaranteed global medium term note programme. The size of the deal was not disclosed.

Net proceeds will be used by Temasek and its investment holding companies to fund their ordinary course of business.

90 to 95 basis points above US treasuries is arguably, not very high, considering that effectively the proceeds can be used by any of its investment holding companies to do anything.

Also, do other sovereign wealth funds borrow by listing on their own local stock exchange?

So, in a sense, they take our money – now ask us to give even more money and they will keep the difference in the returns that they get?

Moreover, if you look at Temasek”s contribution to the NIRC vis-a-vis the Budget surpluses almost every year – the people’s money is being effectively accumulated like forever, and has and may never comes back to Singaporeans.

As to “The notes will be issued by Temasek Financial (I), a wholly owned subsidiary of Temasek. Temasek, which has a triple-A credit rating, will guarantee the notes” – does this mean that the “guarantee” may implicitly be Temasek Holdings and flow through to the Government and the citizens of Singapore?

In this perspective – shouldn’t Parliamentary approval or at least a mention be done, given that the size may be as much as US$20 billion (S$27.2 billion)?

With regard to “The bonds will be listed on the Singapore Exchange. They are being offered in the United States under Rule 144A, and elsewhere in the world under Regulation S” – according to Investopedia – “What is ‘Rule 144A’

Rule 144A is a Securities and Exchange Commission (SEC) rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves. This has substantially increased the liquidity of the securities affected because institutions can trade these securities among themselves, sidestepping limitations imposed to protect the public” – does this mean that it is a “higher risk” instrument?

If so, is it appropriate for it to be listed in the Singapore stock exchange?

(Read more: Rule 144A https://www.investopedia.com/terms/r/rule144a.asp#ixzz5MLp75IY1 )

It may also be interesting to note that “A restricted offering into the States is often combined with an unrestricted placement of securities offshore (i.e. outside of the US) under the provisions of Regulation S.

 

Leong Sze Hian

 

 

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7 Responses to “Temasek US$20b bonds: Some questions?”

  • LIONS:

    TH is really sick as its senior managers are SICKOs!

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  • HarderTruths:

    Must be that Ho person again. Some people will never learn when it is not their money.

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  • The dishonorable Son:

    Bonds offered by Temasek to institutional investors are now practically worthless. Temasek is having difficulty honoring matured loans.
    No one is going to fall for it the third time.
    It’s a ticking time bomb Ponzi scheme.
    PAP is milking the dafts to patch up their evil doings and debacles.

    The solution is to turn to local dafts under retail offerings. First they can change the rules and dishonor anytime without repercussions.
    They will not have to deal with institutional investors, especially those international ones as they have the clout to challenge any fraud. Just take a leaf off 1MDB lesson.

    So anything “offered” by the evil greedy PAP regime, Beware!!
    Learn from the past! Listen to the old wise saying!
    PAP is a regime with little credibility.
    Just look at CPF and HDB. With just a CB mouth, they stole everything.

    The Chinese government already branded Singapore government as opportunists and not welcomed to participate in the 1belt1road initiative, other than those things that would make us the biggest Roberts again.

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  • True facts:

    Keep borrowing to gamble that’s why everything up to pay the interests charged on the loans. In the end keep increasing GST if cannot meet the payment like Hyflux.

    Mismanaged.

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  • UniQ:

    I can confirm this wan Tua Kee….

    Sinkies oh Sinkies….

    Claim to be among the best educated……..LOLOLOLOLOLOLOLOL….

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  • OMG:

    Don’t take risks, better to put money in FDs.

    10 years is a very long time, what will happen in a decade, nobody will knows. In 10 years time, whether TH is still existing or not, nobody will knows.

    Don’t bet your money on the small returns that TH will give you. Be safe rather be sorry.

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  • clown pap lack of talents !!!:

    OMG:
    Don’t take risks, better to put money in FDs.

    10 years is a very long time, what will happen in a decade, nobody will knows. In 10 years time, whether TH is still existing or not, nobody will knows.

    Don’t bet your money on the small returns that TH will give you. Be safe rather be sorry.

    agree, bro. well said. we tell everyone who listens the risk is very high since temasick is actually the vehicle for political abuse by clown pap and S$m gang which explains why the whole setup is so opaque and every loyal puppy and loyal b*t*h is given time in the setup to reap loyalty S$m.

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