Temasek raises £350m with innovative fund-boosting deal

TEMASEK has launched a S$650m (£350m) bond exchangeable into shares in the London-listed bank Standard Chartered, bookrunner Bank of America Merrill Lynch said yesterday.

Temasek, a sovereign wealth fund for the Singapore authorities, is an 18 per cent shareholder in Standard Chartered.

The offering of the three-year, zero coupon bonds by Temasek Financial, a special purpose vehicle, will be priced on 18 October.

There will be an over allotment option of S$150m.

Bankers said that Temasek was using its shareholding in Standard Chartered to raise money on exceptionally cheap terms.

The German government has raised funds using stakes in Deutsche Post and Deutsche Telecom as collateral but intercontinental deals and cross-currency deals such as this Temasek deal are rare.

Bank of America Merrill Lynch is the sole bookrunner on the deal.

If the entire Temasek bond was exchanged into Standard Chartered shares, then Temasek’s 18 per cent shareholding would come down by around 1.2 per cent.