Singapore’s Temasek Considers First Euro-Bond Sale Since 2016

(Bloomberg) -- Singapore’s Temasek Holdings Pte is eyeing its first euro-bond sale in almost four years, as low borrowing costs draw more Asian issuers to Europe.

The state investor may sell 12-year and 30-year benchmark notes, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. The AAA rated issuer is the largest shareholder in a list of Singaporean companies including Singapore Airlines Ltd., oil-rig builder Keppel Corp. and Singapore Telecommunications Ltd.

Temasek may join a wave of Asian and global issuers turning to Europe’s bond market, as negative interest rates and investor demand holds down borrowing costs versus dollars. China sold its first euro bond in 15 years last week, stoking a record year for emerging-market euro sovereign sales, and U.S. companies have also issued an unprecedented amount of single-currency notes.

Temasek last month offered to buy a controlling stake in Keppel for about S$4 billion ($3 billion). It currently owns about 20% of the company, the world’s biggest oil-rig builder.

The state investor, which has two euro bonds outstanding, is more broadly seeking capital for a range of projects including 5G expansion at M1 Ltd., the Singaporean phone company it helped acquire. It is also seeking investments that will make it more more palatable to environmentally minded clients.

Singapore’s export-reliant economy has seen a downturn in the second half of the year amid trade tensions between the U.S. and China, two of its biggest trading partners. Prime Minister Lee Hsien Loong has said the city-state will be “lucky” to achieve positive growth for the year.

Euro investment-grade borrowing costs are at about 0.5%, versus 3% in dollars, according to Bloomberg Barclays index data.

Barclays Plc, BNP Paribas SA, Credit Suisse Group AG and HSBC Holdings Plc are helping to market the potential Temasek bond sale, the person said.

To contact the reporter on this story: Neil Denslow in London at ndenslow@bloomberg.net

To contact the editors responsible for this story: Hannah Benjamin at hbenjamin1@bloomberg.net, Vivianne Rodrigues, Katrina Nicholas

©2019 Bloomberg L.P.