Housing and Development Board (HDB) 3.995% 7Yr Senior Bond SGD

Shawn Sng  |   29 Nov 2022  |    194 views

Tags: H2HL

The Housing and Development Board (HDB) has just announced the issuance of its 7-year senior bonds at a final price guidance of 3.995%. The proceeds from this note issuance will be used to finance the development programmes of HDB and its working capital requirements as well as to refinance existing borrowings. These bonds comes with a 7-year tenor which will be maturing on 6th June 2029. The coupon payment for these bonds will be done semi-annually and it is scheduled every 6th June and 6th December, with the first payment commencing on 6th June 2023.

 

The Housing & Development Board (HDB) is a statutory board of the Ministry of National Development (MND), and it was established on 1 February 1960. Its mission is to provide Singaporeans with affordable, quality housing and a great living environment. Some principal activities include: developing public housing and related facilities; allocation of properties and management of public housing and related facilities. HDB currently has a credit rating of AAA from Fitch and the new issuance is also expected to be rated AAA.

 

Financials

In FY2022, HDB net assets increased from $15.36bn in FY2021 to $15.37bn in FY2022. The net deficit stood at $4.34bn up by approximately 87.15% from the previous $2.31bn in FY2021.This is largely due to an increase of home ownership deficit ($3.85bn in FY2022) which has almost doubled from ($1.95bn in FY2021). However, this deficit will be covered by a government grant of $4.4bn that will be provided this year. The Ministry of Finance (MOF) will also act as the lender of last resort to the HDB for its funding requirement as the MOF has funded the HDB’s past deficits. Cash and cash equivalent have increased from $62.8mn in FY2021 to $126.1mn in FY2022.

 

Due to rising interest rates conditions which have pushed bonds rate to go even higher, this new issuance is a step up of approx. 0.56% as compared to a similar bond issuance back in September, in which HDB had issued a 7-year unsecured bond at a final price guidance of 3.437%. Thus for investors who wish to lock in this attractive coupon rate for a duration of 7 years, these bonds would definitely be one to look out for as it is a quasi-government bond that has a low likelihood of defaulting. As the initially offering has closed for subscription, investors who are interested in these notes will have to head onto the bond’s secondary market in our Poems platform to get hold of them from sellers. These notes can be transacted in a minimum lot size of $250K.

 

Related Articles

Recent Articles

Thomson Medical 5.5% 5NC1 Senior Unsecured SGD

Thomson Medical Group recently announced the issuance of its 5NC1 senior unsecured bonds at a final price guidance of 5.5%.

Shawn Sng  |   24 May 2023

Sembcorp Industries 4.6% 7Yr Senior Green Bonds

Sembcorp Industries (SCI) recently announced the issuance of its Senior unsubordinated Green bonds at a final price guidance of 4.6%.

Shawn Sng  |   09 Mar 2023

Hotel Properties Limited 5.25% 5Yr Senior SGD

Hotel Properties recently announced the issuance of its Senior unsubordinated bonds at a final price guidance of 5.25%.

Shawn Sng  |   02 Mar 2023

Disclaimers

These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the "Research") contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

?>