CGIF guarantees Nexus
CGIF supports school group’s maiden bond deal with innovative structure
NEXUS International School (Singapore) has issued a S$150 million (US$110.30 million) amortizing bond to finance the flagship school of the Malaysian-based Taylor’s Education Group. The 12-year offering, guaranteed by Credit Guarantee and Investment Facility (CGIF), represented the inaugural capital markets transaction of the Malaysian group. It was oversubscribed by both onshore and offshore investors through a public offering.
This innovative issuance, announced on December 3, accomplishes multiple Asean bond market development aspirations. As an Asean-themed transaction, the CGIF guarantee facilitated Taylor’s Education Group in financing its new 2,000-student campus in Aljunied, Singapore via long-term fixed rate amortizing bonds.
CGIF says the bond is uniquely one of only a few Singapore dollar amortizing bonds to be issued in the past two decades, underpinning its initiative to develop the local currency bond markets, catalyze regional infrastructure financing and promote under-represented bond classes in Asean.
The bond, issued under the Asean+3 multi-currency bond issuance framework, attracted overwhelming demand not only from Singaporean, but also international investors. CGIF CEO Guiying Sun says the deal marks CGIF’s growing role and evolution as a regional guarantor since the bond is CGIF’s longest guarantee tenor to date. It is also CGIF’s first counter-guaranteed risk-sharing collaboration with an arranger and its first guarantee for the education sector.
“The amortizing bond structure demonstrates our innovative and solutions-based approach to simultaneously accomplish optimum structuring and bond market development,” she adds. “The cross-border investor base is indicative of CGIF’s strong market acceptance and this translates to cost savings for the issuer. We are delighted to facilitate the group’s debut issuance and partner Taylor’s Education Group in its Asean expansion.
Jiten Arora, global head of commercial banking at Standard Chartered, which acted as the sole lead manager for the transaction, cites the bank’s collaboration with CGIF and the issuer to come up with an innovative deal structure that achieved Taylor’s Education Group’s key objective of having an appropriate capital structure to fund its large capital investment in Singapore through a long-dated fixed rate instrument at a competitive funding cost. It also helps achieved CGIF’s key objective to enable further development of mature Singapore dollar bonds through an issuance of an amortizing instrument that comes with a counter-guarantee.
Taylor’s Education Group is one of Southeast Asia’s premier private education groups. Included among the higher education institutions it owns and operates are Taylor’s University, Taylor’s College and British University Vietnam.
CGIF is a multilateral facility established by Asean members, China, Japan, South Korea and the Asian Development Bank. It commenced its guarantee operations on May 1 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit worthy Asean+3-domiciled bond issuers.
9 Dec 2019