DBS unveils US$10b global covered bond programme

Singapore’s first covered bond offering.

DBS yesterday unveiled a US$10 billion global covered bank programme, the first covered bond offering in the Singapore market.

Under the programme, DBS will issue covered bonds from time to time. Covered bonds are rated higher than unsecured debt, often attaining the coveted AAA rating, as investors have recourse to both the issuer and a portfolio of assets.

DBS said that issuing covered bonds will allow the bank to reach investors in high-grade securities. It will also coordinate a global roadshow to introduce the programme to the international investor base.

“For DBS, the programme enables us to engage a fresh group of investors and to access liquidity with greater cost efficiency. This will lower our overall funding cost. Subject to market conditions, we look forward to launching our first issue of covered bonds in USD or euro, targeting institutional investors,” said DBS Chief Financial Officer Chng Sok Hui. 

The programme has received approval-in-principle from the SGX. Its dealers will be DBS, Barclays, Citigroup, Deutsche Bank, J.P. Morgan, Société Générale, and UniCredit Bank.