John Hancock Life Insurance Company of the US has become the first foreign company in 2001 to issue a Singapore dollar bond, in a S$100 million ($57.5 million) deal via Citibank. It is the third time that the company has tried it's luck on the Singapore bond market, making it the only foreign firm to do so, following the issue of S$150 million of five-year bonds in July 1999 and a S$180 million deal launched in October 2000.
The latest transaction, issued through the John Hancock Global Funding II vehicle, features fixed rate bonds of 10-year maturity that carry an annual coupon of 4.28%. The notes were rated triple-A by Fitch IBCA and double-A by both Standard & Poor's and Moody's. Lui Chong Chee, managing director of Citicorp in Singapore, believes the deal benefited from investors looking for longer dated paper, but was good for the issuer because of interest rate levels. "This is an opportune time for John Hancock to tap the local bond market, as interest rates are at their historical lows," Chee said in a statement.
Despite the fact that issuing bonds in Singapore dollars is dependent on the status of the swap markets (proceeds must be swapped out of Singapore into US dollars before they can be sent overseas), John Hancock obviously feels this is compensated by the speed in which deals can be executed. "We are delighted not only to be able to raise funds from the Singapore market again within a relatively short period, but to also significantly increase the tenor of financing as well," said Ronald McHugh, vice president at the company.