DBS BANK ARRANGES THE FOURTH ASSET SECURITISATION IN SINGAPORE

DBS is pleased to announce its fourth asset securitisation on an office building, 268 Orchard Road (the `Building’). The first three transactions were the securitisation of NOL Building, Robinson Point and Century Square.

DBS Bank, a pioneer in asset securitisation in Singapore, is the arranger and underwriter of the Issue. This innovative transaction will enable DBS Land to sell the asset it has identified for divestment. DBS Land will sell its shares in RE Properties, owner of 268 Orchard Road to Baronet Limited, a special purpose company. Baronet Limited will issue S$184 million 10-year fixed rate bonds together with 18,400 Preference Shares for the purchase. The Bond Issue will comprise 35% Junior Bonds and 65% Senior Bonds.

There are several credit enhancements to the transaction. With the Junior Bonds subordinated to the Senior Bonds, the latter will have a 35% security buffer and the Building as collateral. Moreover, as the Building is leased back to DBS Land for 10 years, all bondholders are assured of a well-defined cash flow stream. Baronet Limited also has an option to put the Building back to DBS Land at the end of the 10^th Year which provides bondholders with an assured take-out. 

In addition to the yield, bondholders will have a share in the potential gain upon the sale of the Building. DBS Land has the option to repurchase the Building from the 4^th year onwards.

268 Orchard Road is a quality freehold building. The Issue is expected to be launched in August’99, details of which will be given closer to the launch date.  

With this 4^th asset securitisation transaction arranged, DBS Bank clearly establishes its position as the market leader of asset securitisation products. To date, DBS Bank has arranged and underwritten a total of close to S$800 million securitised bonds, backed by four commercial properties.

Mr. Eric Ang, Managing Director & Head DBS Capital Markets, said ‘DBS Bank is committed to playing an active role in developing more asset securitisation products and will continue to customise such products to suit the needs of both investors and issuers.  Following the successful launch of the Visor credit enhanced senior bonds secured on Robinson Pt, the Bank will continue to make available a portion of the Baronet Bonds to retail investors."