Housing and Development Board (HDB) 4.09% 5Yr Green Senior Bond SGD

Shawn Sng  |   18 Oct 2022  |    1816 views

Tags: H2GE

The Housing and Development Board (HDB) has just announced the issuance of its 5-year green senior bonds at a final price guidance of 4.09%. These are green senior unsecured bonds, and the proceeds from this note issuance will be used to finance or refinance Eligible Green Projects under the Project Category of Green Buildings and for such other purposes, in each case, as set out in the “4.1 Use of Proceeds” section of the Green Finance Framework of the Issuer.

The green bonds comes with a 5-year tenor and will mature on 26th October 2027. The coupon payment for these green bonds will be done semi-annually. It is scheduled every 26th April and 26th October, with the first payment on 26th April 2023.

 

The Housing & Development Board (HDB) is a statutory board of the Ministry of National Development (MND) and 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.

 

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 increase from $62.8mn in FY2021 to $126.1mn in FY2022.

 

With the rising interest rates, quasi-government bond yields are certainly looking attractive for investors to consider for their portfolios. Back in July, HDB had also issued 5-year green senior unsecured bonds but at a final price guidance of 2.94% (a difference of 115bps spread for the same tenor) and regular senior unsecured notes at 3.437% for a tenor of 7 years back in September.

 

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