Aviva Singlife Holdings (ASH) debuted in the Singapore dollar bond market, pricing on November 16 a S$550 million (US$410.45 million) offering, representing the first Singapore dollar bridge-to-bond transaction and the first acquisition financing for a tier 2 issuance in the Singapore dollar market.
The 10.25-year non-call 5.25-year Reg S deal was priced at par with a coupon of 3.375%, or 37.5bp tighter than the initial price guidance of 3.75%. The issuance immediately gained traction with investors with demand reaching S$1 billion within the first hour of launch and the final order book amounting in excess of S$3.5 billion from 143 accounts.
In terms of geographic distribution, 84% of the bonds were allocated in Singapore and the remaining 16% in other markets. By type of investors, asset managers and insurance companies accounted for 67% of the paper, private banks 30%, and banks and other investors 3%.
The deal was announced after two days of roadshow meetings, which were attended by 55 accounts across Asia and Europe, including a strong mix of high-quality institutional investors. The fund raising follows robust investment grade ratings received a week earlier from both Moody’s Investors Service and Fitch Ratings.
Aviva Singapore and Singlife are the two key operating companies of ASH. On September 11, Singlife announced it will merge with Aviva Singapore and the integration of the two entities expected to be completed over the next six to 12 months. Both entities will enjoy a high degree of management integration and capital fungibility post-merger.
Aviva Singapore, according to Moody’s, accounted for over 90% of total assets (prior to new capital injections) and net premiums written of the combined group (Aviva Singlife) as of the end of 2019, and will be the key profit contributor to ASH in the near term.
ASH deputy chairman and Singlife group CEO and founder Walter de Oude says the success of this deal is a testament to the potential that a new insurer can have with big ambition and the right partnerships to execute. “As we move into 2021 and the next chapter of our journey to reimagine finance, we will double down on these ambitions and bring our innovative products across the region,” he says.
Proceeds from the bond offering are earmarked to funding purchase consideration of the acquisition and for capital adequacy purposes. Standard Chartered acted as the sole global coordinator for the transaction, as well as a joint bookrunner and lead manager, along with DBS. Standard Chartered was also the buyside adviser for Singlife.