CapitaLand has sold $350 million worth of 10-year, Singapore-dollar bonds at a surprisingly low price than was expected, through a debt issue that was oversubscribed by investors.
The property firm had planned to sell only $150 million worth of the unsecured bonds but agreed to raise the size of the issue by $200 million despite overwhelming demand from investors.
The bond sale took just 30 minutes to attract orders, said Clifford Lee, head of fixed income at DBS Group, the sale’s sole manager. The sale ended four hours later; attracting 78 accounts worth $1.2 billion of orders, eight times bigger than the planned issue size.
The sale was primarily intended to set up a benchmark for the company’s 10-year borrowing costs, added Mr. Lee.
Singapore investors purchased 90 percent of the bonds, while the other 10 percent was sold to overseas investors, primarily in Hong Kong.
The second-biggest buyer of the bonds was a private bank, which snapped up 31 percent of the issue, while insurers took up the largest portion, at 38 percent.
“The private bank participation has been growing, because bonds are becoming increasingly attractive to private-bank clients as an asset class, with the volatility in equity markets,” said Mr. Lee.
Other banks bought 17 percent of the bonds; fund managers acquired 12 percent; while the remaining bonds went to other investors.
The funds raised will be utilized as general working capital, to refinance existing debt and for new investments, said CapitaLand.