Clifford Chance

Clifford Chance advises Credit Suisse and Standard Chartered Bank on Singapore's first switch tender offer

Leading international law firm Clifford Chance has advised Credit Suisse and Standard Chartered Bank as dealer managers for a S$60 million switch tender offer for Pacific International Lines (Private) Limited. Standard Chartered Bank intermediated the settlement of the switch as billing and delivery bank.

The transaction is the first time that switch tender technology has been used in the Singapore dollar bond market and for notes cleared through Singapore's Central Depository (Pte) Limited. This approach is more commonly used by sovereign issuers in the US dollar space.

The switch involved an offer to holders of Pacific International Lines' existing S$130 million notes due 2018 to switch into new S$60 million notes due 2020, thereby lengthening the tenor of a proportion of the outstanding debt. Holders could otherwise maintain their position in the existing notes due 2018.

Partners Raymond Tong (Singapore law) and Matt Fairclough (international securities law) and counsel Gareth Deiner led the transaction, alongside associates Cherrylene Lee, Jeffery Hung and trainee Alysia Tay.

Raymond offered, "We are delighted to have been able to assist Credit Suisse and Standard Chartered Bank on this market-first transaction for Pacific International Lines; a deal that demonstrates our ability to combine our knowledge of international debt capital markets and liability management generally, with our on-the-ground execution capability under Singapore law."

Gareth shared, "This transaction is an excellent example of the growing sophistication of the Singapore dollar bond market, in that liability management is increasingly being used as a tool for bond issuers to optimise their capital structure, rather than simply a last resort in distress scenarios. Given the practical challenges associated with the longer offer periods necessary to effect a public tender offer in the Singapore dollar bond market, this could be an attractive option for issuers seeking to achieve similar balance sheet optimisation through an accelerated liability management exercise. In light of the significant refinancing wall in the Singapore dollar bond market due in 2018 and 2019, this transaction provides a timely innovation for issuers who are currently assessing their options."

Clifford Chance has also acted for the joint lead managers on the first sovereign switch transaction (US$1 billion) for the Vietnam Sovereign Debt issuance in 2014, and recently, for KrisEnergy in the first ever Singapore dollar bond market mandatory exchange of two tranches of senior SGD notes for senior oil price-linked notes, as part of KrisEnergy's broader capital restructuring exercise.

Learn more about key considerations for debt issuers in Asia Pacific here.