Banks In Race For PUB $650m Bonds: Sources

Source : The Business Times, September 19, 2007

(SINGAPORE) Singapore's state-owned Public Utilities Board (PUB) has asked banks to pitch for S$650 million worth of bonds with maturities of seven and 20 years, sources said yesterday. The 20-year issue would be the first corporate long bond since 2003, when the Land Transport Authority (LTA) issued S$200 million worth of 20-year bonds.

Banking sources said Oversea-Chinese Banking Corp and HSBC are front-runners for PUB's seven-year S$350 million bonds while DBS is likely to get the mandate for the S$300 million 20-year issue. In March, the Singapore government issued a 20-year benchmark bond for the first time. It was unclear when the PUB's long bond will be launched, a banker pitching for the deal told Reuters.

PUB manages the nation's reservoirs, waterworks, rivers, drainage system, and sewerage system to optimise the island's limited water resources. Singapore, which is heavily dependent on water piped in from neighbouring Malaysia, is trying to diversify its water sources, to include rainfall catchment, water from Malaysia, recycled waste water and desalination.

Singapore's statutory boards such as PUB and the Housing and Development Board used to dominate the corporate bond market, but now banks and property companies such as Keppel Land and Hongkong Land have started tapping the domestic bond market.

But the secondary market for bond trading is lacklustre although debt issuance in Singapore rose by 37 per cent to S$157 billion last year, mainly due to the sale of corporate debt. Outstanding Singapore dollar debt issues increased by 11 per cent to S$67 billion, while debt issuance in other currencies climbed 17 per cent to S$90 billion, central bank data showed. -- Reuters