Fullerton Health launches $100 million bond offering rated “AA” by S&P
Fullerton’s maiden S$100 million bond issuance guaranteed by Credit Guarantee and Investment Facility, a trust fund of the Asian Development Bank (“CGIF”)
The bond issue comprise of a 5-year S$50 million tranche and a 7-year S$50 million tranche
First Singapore corporate to be guaranteed by CGIF
SINGAPORE, 30 June 2016 – Fullerton Healthcare Corporation Limited (“Fullerton Health” or “the Group”), a leading provider of corporate healthcare solutions across Asia Pacific, is pleased to announce that the Group has successfully launched its S$100 million bond offering. The offering consists of two tranches, a S$50 million tranche due 2021 and a S$50 million tranche due 2023. Both tranches are being backed by CGIF, a trust fund of ADB, and have been assigned a “AA” rating by S&P. CIMB and OCBC have been mandated to lead manage the bond issuance.
The issue will be the fifth SGD-denominated bonds wrapped by CGIF. Incepted in 2010, CGIF aims to promote financial stability and to boost long-term investment in the ASEAN+3 region by providing guarantees on local currency denominated bonds issued by corporations in the region, in order to mitigate currency and maturity mismatches and make the region’s financial system more resilient to capital flows and external shocks, which contributed to the Asian financial crisis. CGIF has total capital contributions of US$700 million from ASEAN+3 countries, as well as from ADB.
Fullerton Health is the first issuer in the healthcare sector that is tapping the SGD bond market with the support of CGIF’s credit guarantee. The 5-year tranche is being priced at a coupon rate of 2.45% while the 7-year tranche is being priced at a coupon rate of 2.75%. Both tranches were issued at an average premium of approximately 78 basis points over the prevailing Swap Offer Rate (SOR).
Commenting on the success of the launch, Dr Ramesh Rajentheran, Chief Financial Officer of Fullerton Health said, “Our Group is delighted with the successful launch of our bond offering. The funds would be harnessed to strengthen our financial position and pare down existing short-term debt with various banks and to reduce our reliance on bank borrowings going forward.
Our Group is encouraged by the demand shown for our bonds despite the current challenging situation faced in global financial markets. The successful bond issue signifies strong appetite for debt securities in the market and a vote of confidence for the healthcare industry and in Fullerton Health.
Corporate healthcare market has been on an uptrend especially in the Asia Pacific region and our Group is well-poised to ride on the surge. We pride ourselves as the leading corporate healthcare solution provider helping corporations and insurers to save millions of dollars each year. In the process, hopefully we can also help man-on-the street to lower their average healthcare spending in light of the ever increasing healthcare costs in the region boosting affordability and accessibility.
The credit guarantee provided by CGIF is a strong testament to our Group’s ongoing capabilities and profitability going forward. We would like to express our heartfelt appreciation to CGIF’s support and their faith in the trajectory of our industry as well as CIMB and OCBC for their hard work during the bond sales.”