Temasek to raise S$650m through bonds due 2014

Institutional investors have one week left as the offering is scheduled to close on 25 October 2011.

Temasek announced that it has placed out S$650 million Zero Coupon Guaranteed Exchangeable Bonds due 2014 to institutional investors through its wholly-owned subsidiary, Temasek Financial (III) Private Limited.

“TFin-III has granted to the Lead Manager a greenshoe option to increase the size of the issue by up to an additional S$150 million, exercisable anytime prior to the date which is 14 days after the settlement date. If exercised in full, the gross proceeds of the issue would be S$800 million,” said the announcement.

TEB2014 – STAN LN will, upon exercise of the exchange rights thereunder, be exchangeable for ordinary shares, par value of US$0.50 cents each, of Standard Chartered PLC. According to Temasek, TFin-III may, at its option, elect to cash settle any exercise of the exchange rights.

The payment and exchange obligations of TFin-III under the TEB2014 – STAN LN will be unconditionally and irrevocably guaranteed by Temasek. “Unless previously exchanged or redeemed, TEB2014 – STAN LN will be redeemed at par 3 years from the settlement date. TEB2014 – STAN LN will carry a zero coupon,” added Temasek.

The exchange price of S$36.2912 per Company share has been set at a 27% premium over the closing price of GBP14.29 per Company share on 17 October 2011 converted at an exchange rate of GBP:SGD 1.9997. Temasek said the maximum number of Company shares that may be deliverable upon exchange will initially be about 17.9 million, assuming no exercise of the greenshoe option, and about 22.0 million, assuming full exercise of the greenshoe option.

The Lead Manager is Bank of America Merrill Lynch, acting as sole bookrunner, as stabilizing manager and settlement agent in connection with the placement of TEB2014 – STAN LN.

Net proceeds are intended to be provided to Temasek and its investment holding companies to fund their ordinary course of business.