Singtel has priced a US$500m 10-year bond as the Singapore-based telecoms giant looks to refinance existing debt.
The notes carry a 3.25% coupon and were 2.5 times oversubscribed with an order book reaching about US$1.25bn.
They are part of the…
Singtel has priced a US$500m 10-year bond as the Singapore-based telecoms giant looks to refinance existing debt.
The notes carry a 3.25% coupon and were 2.5 times oversubscribed with an order book reaching about US$1.25bn.
They are part of the telco’s S$10bn (US$7.45bn) euro medium term note programme, and were issued through wholly owned unit Singtel Group Treasury.
Citigroup, HSBC, Mizuho and Morgan Stanley acted as joint lead managers and bookrunners.
Singtel CFO Lim Cheng Cheng said: “We are pleased to have received very keen support and interests from investors which reflected confidence in the Singtel Group’s strong credit quality.”
Moody’s and Standard & Poor’s rated the notes Aa3 and A+, respectively.
Nidhi Dhruv, an analyst at Moody’s, expects the majority of proceeds will go towards refinancing existing debt, making it broadly leverage neutral in the near term.
Singtel’s net adjusted leverage increased to 1.6 times as of March 2015, compared with 1.5 times last year, after securing debt to buy digital marketing groups Kontera and Adconion, and extra mobile spectrum in Australia for its Optus unit.
The Singaporean group, which bought US cyber security firm Trustwave earlier this year, has pointed to higher accrual capex of S$3bn (US$2.24bn) for 2016. These investments include the deployment of 4G services across Australia and a new unified carrier billing and customer care system.
“The increased capex, coupled with the acquisition cost of approximately US$810m for Trustwave and expected further investments in the Digital Life business, should keep Singtel’s leverage – as measured by adjusted net debt/EBITDA – at the higher end of our tolerance for the rating at 1.75-1.80 times over the next 1-2 years,” said Dhruv.
Singtel is 51%-owned by state-controlled Temasek and, as well as being Singapore’s largest operator, it is the second-biggest integrated telco in Australia. It also owns stakes in other large Asian telcos including India’s Bharti Airtel and Indonesia’s Telkomsel.
Earlier this month, the telco announced it would shut off 2G services in Singapore from 1 April 2017 to focus on 3G and 4G, stating that “only an extremely small percentage of customers remain on 2G-only mobile devices”.
