Temasek launches US$5bn euro-commercial paper programme

The commercial paper programme will supplement Temasek's strong liqudity and the proceeds will be used to fund their business.

According to Moody's, the commercial paper notes will be issued by Temasek Financial (II) Private Limited, a wholly owned financing subsidiary of Temasek. They will be irrevocably and unconditionally guaranteed by Temasek and rank pari passu with all other unsecured and unsubordinated debt of both the issuer and Temasek. The proceeds will be used to fund Temasek's ordinary course of business.

"The commercial paper program will supplement Temasek's strong liquidity," says Elizabeth Allen, a Moody's VP/Senior Credit Officer. "We expect that, in the near term, the average borrowings through the program will be modest."

Although the program is not backed by any committed credit facilities, Moody's draws comfort from Temasek's consistently excellent liquidity profile over the last few years. At the holding company level, it is often in a net cash position. Its liquidity profile is characterized by a high level of cash and liquid assets, as well as a long debt maturity profile. Its market reputation and good access to the bank market also support its liquidity.

In addition, Temasek's has a significant degree of financial flexibility in its investment spending and asset monetization plan.