Temasek’s second issue of 10-year bonds: company

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SINGAPORE (AFP) - – State-linked Singapore investment firm Temasek Holdings said Monday it was planning a new 10-year bond offer as part of a capital-raising programme worth five billion US dollars.

The bonds to be issued by Temasek Financial, a wholly owned subsidiary, are “fully and unconditionally guaranteed” by its parent company, Temasek said in a statement.

“The issuer intends to provide the net proceeds from the offering to Temasek and its subsidiary companies to fund their ordinary course of business,” the statement said.

Temasek did not provide details on the size of the offer but Dow Jones Newswires quoted an unnamed source familiar with the plans as saying it is likely to be one billion US dollars.

It will be the second such offer in Temasek’s 35-year history. It first raised 1.75 billion dollars from a 10-year inaugural bond issue in September 2005.

Temasek Holdings, among the largest sovereign wealth funds globally, had an investment portfolio worth 130 billion Singapore dollars (93 billion US) as of March 2009.

It announced in September that its net profit sank 67 percent to 6.0 billion Singapore dollars in the year to March as the global crisis took a toll on its investments.

Global risk evaluator Standard & Poor’s assigned its “AAA” ratings on the new bond issue by Temasek, saying the top grading “reflects its very strong liquidity position, highly diversified and liquid investments.”

“In addition, most of its major investments have strong business risk profiles, with steady and sustainable cash flows,” it said.

Moody’s Investors Service also assigned its top “Aaa” to the offering.

“The Aaa rating reflects Temasek’s strong financial profile at the holding company level,” said Moody’s.

“Given that Temasek, with an objective to maximize long-term shareholder returns, has tremendous flexibility in its investment strategy and investment horizon, management’s demonstration and commitment to strong financial discipline is an important rating driver.”

Portfolio up 32 pct from April to end-July

* Portfolio at $122 bln end-July; August in line with indexes

* Buys stakes in S.Korea’s ENK and Brazil’s San Antonio

* Still open to new investments in financials

By Neil Chatterjee and Saeed Azhar

SINGAPORE, Sept 17 - Temasek recovered from most of its portfolio losses this year as markets rallied, saving the Singapore wealth fund’s blushes after ill-timed exits from Wall Street banks and giving it firepower for new deals.

CEO Ho Ching said any dip in markets could be a buying opportunity for the $122 billion investment firm that is still open to buying financials and investing in emerging markets.

Temasek [TEM.UL] lost over an estimated $4 billion on selling its stakes in Bank of America <BAC.N> and Barclays <BARC.L>, but said it had benefited from investing in rights issues for its portfolio firms such as Standard Chartered <STAN.L> since these investments more than doubled by the end of July.

“We are in a very good cash position,” Ho said at Temasek’s annual review on Thursday. “We think there are lots of opportunities in over the long-term.”

The review showed Temasek’s portfolio slumped S$55 billion or around 30 percent to S$130 billion in the year to end-March. Its portfolio then rose 32 percent to S$172 billion by end-July, and its August performance was in line with market indexes, Ho said.

For changes in the value of Temasek’s portfolio, click: http://graphics.thomsonreuters.com/099/SG_TMSK0909.gif

The firm’s value-at-risk was S$28 billion at the end of March, meaning it had a 16 percent probability it would lose that amount or more this financial year, down from a value-at-risk of S$40 billion a year earlier, the review said.

“We believe the worst of the global meltdown risks are behind us,” said Ho. “While there are some green shoots of growth, some structural risks still remain for the medium term,” she said.

Temasek is Singapore’s second-biggest sovereign wealth fund after the Government of Singapore Investment Corp.

Ho, the wife of Singapore’s prime minister, said Temasek’s board would still search for her successor after CEO-designate and former BHP Billiton chief Chip Goodyear unexpectedly resigned in July over strategic differences.

“The big issue is new leadership. Strategy comes from the leadership. Until they sort out the issue of leadership, nobody is going to be clear what the strategy is,” said the head of a private equity firm in Singapore, who declined to be identified.

For a newsmaker on Ho, click [ID:SIN529783]

PROFIT HIT

The investment company, whose sole shareholder is Singapore’s Ministry of Finance, said net profit for the financial year fell two-thirds to S$6.2 billion, as it was hit by losses on financial stocks and lower contributions from earnings by its portfolio firms such as DBS Group <DBSM.SI>.

“Like investors everywhere they’re just relieved that the market pulled back from the brink,” said David Cohen of Action Economics in Singapore.

The role of sovereign wealth funds around the world, which oversee about $3 trillion in assets, changed from a key source of capital for struggling Western banks early in the crisis, to governments redeploying funds to stabilise home markets.

For a factbox on Temasek, click [ID:nSIN192308].

Temasek said in its annual review it had bought a 19.5 percent stake in South Korea’s ENK, a supplier of cylinders for compressed natural gas, and 15.4 percent of Brazil oilfield services firm San Antonio International.

SINGAPORE, July 29 - Singapore state investor Temasek said on Wednesday its portfolio had fallen by S$40 billion as of end-March 2009 from a year ago.

“In our Temasek Review last year, we reported an annual value-at-risk of almost S$40 billion last March. This meant a 16 percent probability for our portfolio value to drop more than S$40 billion by March this year. Indeed, it has turned out to be so, and more,” CEO Ho Ching said in a speech.

Temasek had S$185 billion in assets as of end-March 2008, which fell to S$127 billion as of November 2008. Ho did not give the exact portfolio level.

This was the first public comment by Ho, also the wife of Prime Minister Lee Hsien Loong, after Temasek said last week that Charles “Chip” Goodyear will not become CEO due to differences over strategy.[ID:SIN435934]

Ho said Temasek would continue to look at internal and external candidates for her replacement.

SINGAPORE (Dow Jones)–Singapore’s Temasek Holdings Pte Ltd. sold its entire 3.8% stake in Bank of America Corp. (BAC) between January and March this year, swelling its losses from soured investments by about $4.6 billion.

Temasek, a state-owned investment company, disclosed the stake sale in a quarterly report filed with the U.S. Securities and Exchange Commission.

A Temasek spokeswoman confirmed the Bank of America divestment, but didn’t give any other details.

According to people familiar with the situation, Temasek sold the Bank of America shares for an average $7 a share, netting $1.3 billion.

Temasek made some high-profile investments in the past two years, including in Merrill Lynch and in Barclays PLC, in which it increased its stake in June 2008 to a little over 2% paying about $399 million.

Many investments have turned sour with the financial crisis battering share prices and asset values.

Temasek’s investment portfolio fell 31%, or S$58 billion, to S$127 billion in the eight-month period ended Nov. 30, Singapore’s Senior Minister of State for Finance Lim Hwee Hua said earlier this year.

The investment firm bought a 14% stake in Merrill in stages starting from December 2007, paying $5.9 billion in total. At that time, it described the purchase as a long-term investment.

When Bank of America acquired Merrill in January, that stake was converted into 189 million Bank of America shares.

Temasek was not informed of the merger talks between Merrill and Bank of America and “never wanted to be a Bank of America investor,” a person familiar with the situation said. “Very early in the year, the plan was set in motion to divest the holding,” this person said.

A second person close to the situation said: “(There was) little potential in Bank of America shares. If one sees the results of the stress tests in the U.S. and analysts’ reports on Bank of America, the picture is not bright.”

The results of the stress tests, during which U.S. regulators scrutinized 19 financial firms, were released last week and Bank of America was asked to raise $33.9 billion in common equity.

Shares of Bank of America traded between $2.53 and $14.81 between Jan. 1 and March 31. They closed at $11.31 Thursday.

“Temasek sold between the high and low of Bank of America shares during the first quarter,” thesecond person said.

Despite the losses from the Merrill investment, Temasek continues to be an active investor in the market, the people said.

This year, the state investor has been active in Asia, participating in various rights offers by firms like DBS Group Holdings Ltd. and Chartered Semiconductor Manufacturing Ltd., in which it holds 28% and 62.33% respectively, and by Bank Danamon, a mid-sized Indonesian bank.

According to Thursday’s SEC filing, Temasek also sold its entire holding of American Depositary Receipts of ICICI Bank Ltd. (532174.BY), India’s largest non-state-owned bank by assets.

Temasek held 3.6 million ADRs in December, according to a previous SEC filing for the quarter ended Dec. 31.

Treasury- No comment on Temasek,investment welcome

WASHINGTON, July 29 (Reuters) - A senior U.S. Treasury official declined to comment on Tuesday on Singapore state-run Temasek Holdings’ [TEM.UL] likely expansion of its stake in U.S. investment bank Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) but said the United States welcomed foreign investment.

“As a general perspective, investment in the United States has been a great driver of innovation and is something that we welcome. It is a great validation,” David McCormick, U.S. Undersecretary of the Treasury for International Affairs, told reporters after delivering a speech.

Merrill said on Monday it would raise $8.5 billion of fresh capital by selling new stock, including a $3.4 billion purchase by Temasek. (Reporting by Alister Bull; Editing by James Dalgleish)