SINGAPORE: Singapore Exchange Ltd is planning a maiden dollar bond offering, which would make it the latest entrant in a rush by Asian firms to lock in cheap borrowing costs.

       The city-state’s sole equities bourse hired banks for a potential United States currency note and will hold investor calls from yesterday, according to a person familiar with the matter, who asked not to be identified because they’re not authorised to speak about it.

       The exchange, which posted a drop in its latest annual profit in part due to rising costs, has been expanding its fixed income, currency and index businesses through acquisitions as it diversifies from equities. Expenses will remain elevated as it continues to invest in growth, chief financial officer Ng Yao Loong said at an earnings briefing earlier this month.

       Boosted by the acquisition of MaxxTrader and potentially more merger and acquisition activity, Singapore Exchange’s revenue growth may be led by market data, connectivity and indexes, and fixed income, currencies and commodities, Bloomberg Intelligence analyst Sharnie Wong wrote in an Aug 10 note.The bourse isn’t the only borrower poised to add to Asia’s pipeline of US currency bonds. China Merchants Bank Co also hired banks for a potential offering of sustainability and green notes. Still, the primary market was muted yesterday with only one company marketing its deal.

       Borrowers have so far sold more than US$254bil (RM1.07 trillion) of dollar bonds in Asia excluding Japan this year, on track to approach last year’s record of about US$346bil (RM1.45 trillion), according to Bloomberg-compiled data. Yield premiums on the region’s investment-grade dollar notes fell below 126 basis points on Monday, a level last seen in February 2020.

       The primary dollar bond market remained low-key yesterday, with ABC International Holdings Ltd marketing the only deal.

       The lack of activity comes as investors await the Jackson Hole symposium later this week, a key event that may offer insights into how the Federal Reserve plans to taper bond purchases.

       Among non-dollar deals, UOL Group Ltd is looking to price a seven-year debt offering in Singapore dollars.

       Spreads on high-grade dollar bonds from Asia excluding Japan narrowed by about one basis point, according to credit traders, putting them on pace for a seventh straight day of tightening. — Bloomberg

       The Markit iTraxx Asia ex-Japan CDS index of high-grade notes dropped 0.5 basis point, according to credit default swap traders. The gauge is poised for a fifth straight day of decline, CMA data show. Sentiment was last week bolstered by a government-backed bailout of China Huarong Asset Management Co. Still, the rescue plan is prompting divergent views among Moody’s Investors Service and Fitch Ratings.

       New issue sales of US CLOs have set a monthly record of approximately US$16.6bil (RM69.98bil), according to data compiled by Bloomberg News.

       US government agencies including the Treasury, Fed and Securities and Exchange Commission are concerned by reports that non-financial corporates aren’t being offered loans linked to Libor alternatives.

       Rock-bottom borrowing costs have put Europe’s lenders on track to redeem all of their eligible junior bonds known as Additional Tier 1 (AT1) this year.

       Just one of the 19 riskiest bonds with a first call option in 2021 is yet to be retired after Austrian lender Erste Group Bank AG said this week it will call an AT1 at the first opportunity in October. A proposed European Union standard for green bonds that’s designed to align investment with the bloc’s climate goals probably will fall flat without additional incentives for issuers, according to SEB AB, which pioneered the instruments. Swedish property company Hufvudstaden is considering issuing its first ever green bond, CFO Asa Roslund says. -- Bloomberg