Singapore lender DBS Group Holdings on June 1 raised US$750 million through a three-year floating rate note (FRN) in a tightly-priced funding exercise.

The Reg S/144A transaction was priced at par with a spread of 49bp over three-month Libor, which was in line with the final price guidance and 36bp inside of the initial guidance of the 85bp area. “The pricing puts DBS in line with the other financial peers that are trading at tight levels such as the Australian and Canadian names,” says a banker familiar with the deal. “This is a pretty effective exercise for DBS in terms of re-pricing their credit curve.”

In accessing the FRN market, DBS tapped the pool of liquidity that would enable them to meet their deal size and price aspirations. “There is a strong demand for this type of product,” the banker points out.

The transaction generated an order book of over US$1.3 billion from 70 accounts, with 47% of the paper distributed in the US, 43% in Asia and 10% in Europe. By type of investors, asset and fund managers accounted for 75%, government agencies 12%, corporates 6%, banks 5% and private banks 2%.

“The deal, as expected, generated a strong demand from asset and fund managers, but it was interesting to see the participation from central banks, sovereign wealth funds and corporates, which diversify their investor base,” the banker adds.

The notes were drawn from DBS Group’s US$30 billion global medium-term note programme. The net proceeds will be used for finance and treasury activities, including the provision of inter-company loans (and other forms of financing) to the DBS Bank Group.

DBS was the sole global coordinator for the transaction as well as a joint bookrunner along with Bank of America Merrill Lynch, Citi, HSBC and Wells Fargo Securities. UBS Securities acted as a co-manager.