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Final ratings assigned to Southeast Asia's first ever rated SME Loan Securitisation

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SME ACCESS Loan extends $100 million of financing for SMEs

SINGAPORE, 6 APRIL 2006 – DBS today announced the successful completion of the first rated loan securitisation scheme in Southeast Asia. The SME ACCESS Loan scheme achieved a portfolio of $100 million of financing to more than 400 SMEs, upon closing of its books on 31 December 2005.

SME ACCESS Loan was launched on 8 April last year to assist SMEs with little collateral or limited track record, and those seeking financing for internationalisation purposes. The scheme was initiated by SPRING Singapore, with support from IE Singapore, and managed by DBS Bank. It was marketed by SME CreditAssist (Singapore) Ltd, a special purpose company set up to provide financing to SMEs through a bridging warehousing facility granted by DBS.

DBS has fully underwritten the issuance of the rated notes which will be fully placed out to institutional and sophisticated investors. The unrated notes have been fully subscribed by its sponsors, SPRING and DBS.

The notes are rated AAA, AA, A and BBB by S&P and Fitch. The notes are floating rate amortising notes, with the weighted average life of the notes ranging from approximately 2 years to 5 years. Investors will take on the prepayment risk in the transaction. Sixty-seven per cent of the notes have been rated AAA, reflecting the high quality of the loan portfolio. The AAA rating, which is also accorded to US treasuries and Singapore Government bonds, is the highest credit rating assigned by rating agencies.

The yields for the various classes of notes are benchmarked to similarly rated Asset Backed Securities (ABS) that trade in the market. The AAA notes carry a lower coupon, while the BBB notes, with slightly higher risk, carry a relatively higher coupon.

Mr Inderjit Singh, Chairman, Action Crucible for Financing, Action Community for Entrepreneurship (ACE), who was instrumental in the launch of the scheme, said: "In our effort to facilitate SMEs' access to financing, we had identified loan securitisation as a possible new instrument to help them. I am pleased that SME ACCESS Loan has indeed opened a new financing avenue for SMEs, especially those that are currently underserved. We hope that this pilot programme will encourage more securitisation of SME loans in Singapore, so that more SMEs can benefit."

Mr Edwin Khoo, DBS Managing Director and Head of Enterprise Banking Group, said: "We constantly explore and initiate innovative solutions to help SMEs grow and are very pleased to pioneer this unique funding proposition for our SME customers. DBS’ expertise and proven track record in structuring products in the capital market allows us to provide new and innovative means for SMEs to secure financing using non-traditional solutions."

He added: "We pride ourselves for the deep and close relationship that we have built with our SME customers. Their business is our business and together we strive to make their business successful."

Mr Loh Khum Yean, Chief Executive, SPRING Singapore, said: "SME ACCESS Loan is part of our ongoing efforts to catalyse new options for financing for our local enterprises. Since the launch of the scheme last year, we have seen a number of other innovative financing tools introduced by various financial institutions. This is good news for our SMEs."

Mr Surinder Kathpalia, Managing Director at S&P, said: "SMEs are one of the key drivers of the Singapore economy. This innovative scheme is a major step towards banking dis-intermediation for the SME industry by providing access to domestic capital markets as an alternative financing source. Standard and Poor’s believes that this development will have a positive effect on the Singapore economy."

Ms Rachel Hardee, Head of Structured Credit, Asia Pacific, at Fitch Ratings said, "The transaction is a collaborative effort between DBS and SPRING. Our goal is to broaden the funding sources for SMEs in Singapore and to serve as a pilot project for further issuances in Singapore and other countries in the region."

Mr Azad Deen, Director of Oriental MES Logistics Private Limited, a marine transport and logistics entity, said: "The SME Access Loan scheme comes at an opportune time as the financing obtained enabled us to expand into the region."

About SPRING

SPRING (Standards, Productivity and Innovation Board) Singapore’s mission is to enhance the competitiveness of enterprises for a vibrant Singapore economy. We work to nurture a pro-business environment that encourages enterprise formation and growth; facilitate the growth of industries; enhance productivity and innovation and capabilities of enterprises; and help increase access to markets and business opportunities.

For more information, please visit www.spring.gov.sg

About DBS

Headquartered in Singapore, DBS is one of the largest financial services groups in Asia with almost five million customers and operations in 14 markets. The largest bank in Singapore and the fifth largest banking group in Hong Kong as measured by assets, DBS’ "AA-" and "Aa2" credit ratings are among the highest in the Asia-Pacific region. DBS has leading positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund raising. Beyond the anchor markets of Singapore and Hong Kong, DBS serves corporate, institutional and retail customers through its operations in China, India, Indonesia, Malaysia, Thailand and The Philippines. More information about DBS Group Holdings and DBS Bank can be obtained from our website www.dbs.com.