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Friday, November 20, 2020 – 4:47 pm
Aviva Singlife Holdings (ASH) new 10.25-year unsecured notes of 550 million Singapore dollars, priced at 3.375 percent, have been underwritten more than six times.
It is the first Singapore dollar (SGD) denominated bond bridge transaction, and also the first acquisition financing for a Tier 2 issuance in the SGD market, according to The Business Times (BT).
In a bond bridge structure, the buyer of an acquisition takes out an interim loan before replacing it with higher yielding bonds.
The initial ASH issuance will finance the combination of British insurance bigwig Aviva Ltd’s Singapore operations with local digital insurer Singapore Life (Singlife). ASH will be the full owner of the proposed operating entity, Aviva Singlife. The merger is expected to be completed in January 2021.
Total ticket orders rose to S $ 1 billion in the first hour of launch, and the final order book exceeded S $ 3.5 billion across 143 accounts, BT understands.
The deal was announced after two days of roaming meetings, attended by 55 accounts of Asian and European investors, including institutional investors.
By type of investor, administrators and insurers accounted for 67 percent of the demand; private banks accounted for 30 percent.
Most of the interest (84 percent) in the notes came from Singapore, according to transaction statistics seen by BT.
ASH Chairman Ray Ferguson said: “The investor interest we receive affirms a shared belief we have that the industry is ready for a new type of insurance.
“A persistent Covid-19 economy demands quality financial services beyond insurance that work to grow and protect the well-being of all.”
Ferguson added that Aviva Singlife will aim to become a regional homegrown brand with a “commitment to mobile customer first.”
Singlife group chief executive Walter de Oude said the success of the sale of the notes “is testament to the potential that a new insurer with high ambition and the right partnerships to execute can have.”
Fitch Ratings assigned ASH a long-term issuer default rating of BBB + with a stable outlook and rated the new notes BBB-.
Moody’s Investors Service gave an insurance financial strength rating of A3 and rated the holding company Baa2.
Standard Chartered Bank (StanChart) was the sole global coordinator of the notes and also acted as Singlife’s purchasing advisor.
StanChart and DBS were the joint lead managers and book brokers for the notes.
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