SGD New Issue Review : HDB 12Y 3.22%


ISSUE: Housing and Development Board
RATING:    Unrated
FORMAT: Reg S Bearer / Off the Issuer’s SGD32  billion Multicurrency Medium Term Note Programme
STATUS:  Fixed Rate, Senior Unsecured
ISSUE SIZE:   SGD500 million (with SGD100M option to upsize)
TENOR:  12 Years
SETTLEMENT DATE:  1 December 2014
MATURITY DATE:  1 December 2026
COUPON DATES:  1 June and 1 December (First Pay: 1 June 2015)
ISSUE PRICE:  100.00
COUPON: 3.22% s/a, ACT/ACT, Following Business Day Conv
ISSUE SPREAD:   SGD SOR (@ 2.56%) + 66bps
DETAILS:   SGD250K x SGD250K / SGX-ST / Singapore Law
SELLING RESTRICTIONS:  Sections 274/275 of the Singapore SFA

HDB makes it a point to issue 6 times a year, I noticed.

List of issues in past 2 years.


There is a certain frequency huh ? Once every 2 months.

I liked the 7 year one back in March and it has done well although it lost out to the 10Y done in Jan.

But how do buy a 12Y now at a 3.22% coupon when we got 3% for 7 years back in March ?

No wonder this is not a multi bank deal.

Look at the HDB curve since Jan. The meat was in the long ends then.


Now that the curve has flattened so, the appeal is diminished.

Yet the Protelindo 10Y sold well enough yesterday at 3.25% and thus I think this HDB will do well enough although I am not so sure we will see an upsize.

The 10Y government bonds are giving us 2.32% and the 15Y at 2.68%, a bit on the low side, if you ask me.

The trouble with us is that we have been so spoilt by the generosity of HDB in the past few years and we have grown used to the “premiums” that they pay, that we do not realise (except for me) that HDB used to be such a premier credit in the past.

And HDB bonds could prove to be the safe haven assets that we shall be seeking when the storm hits.