Singapore Bond House: DBS Bank

IFR Asia Awards 2021
3 min read
Kit Yin Boey

One-stop shop

DBS Bank led the way in the Singapore dollar bond market with its savvy execution skills and broad capabilities, allowing it to guide clients through the challenges that 2021 presented.

Despite volatility and unpredictable pandemic swings, Singapore’s primary market hit a nine-year record of S$25.2bn (US$18.56bn), and DBS took a 38% share, Refinitiv data show.

The bank’s position was supported by a 61-member fixed-income team that serves as a one-stop shop for large and small clients’ funding needs.

One standout moment was acting as sole bookrunner for the National Environment Agency’s S$1.65bn dual-tranche bond debut. Not only was the senior unsecured green bond the first from a Singaporean public agency, it was also the longest-dated publicly marketed unrated green bond in South-East Asia.

DBS helped NEA pull in a book of more than S$2bn for the 10 and 30-year notes in early September, allowing them to price at 1.67% and 2.5%, respectively.

The bank has made sustainable and green finance a cornerstone of its strategy, bringing it up in every conversation it has with potential clients.

“To develop the market, we need supplies,” said Clifford Lee, DBS’s global head of fixed income. “It is more challenging to get ESG-related deals to the market, but we have overcome that with innovation and the development of new structures, such as sustainability-linked bonds.”

DBS proved its mettle in the ESG space when it became a lead bookrunner for the first two SLBs in the Singapore dollar market – a S$250m 10-year 2.48% SLB from Surbana Jurong in February and a S$675m 10.5-year 2.66% SLB from SembCorp Industries in September.

The bank’s global network helped pull foreign investors into Singapore dollar deals. It aided debut issuer Changi Airport Group, rated Aaa by Moody’s, as it sold S$500m of 10-year notes in April at 1.88% – the lowest coupon from an Aaa rated borrower through a bookbuilding exercise since 2000.

In that deal, investors from Asia and Europe – who usually make up 2%–3% of a Singapore dollar book – accounted for a sizeable 11% share, helping to compress pricing.

DBS also helped introduce new features in Singapore Telecommunications’ S$1bn 3.3% perpetual non-call 10.5 bond, rated at A3/BBB (Moody’s/S&P). The deal was the first S&P-compliant perpetual note in Singapore, which restricted SingTel from offering the usual first step-up margin of around 100bp. To overcome this and to placate investors, an initial step-up margin of 25bp will apply from year 10.5 and every 10 years until year 30.5 when the step-up will increase to 100bp.

It worked as investors piled into the deal in April with a final book exceeding S$2.1bn – the largest order book for a Singapore dollar deal in 2021.

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