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Bayfront Infrastructure Management (“Bayfront”) recently issued a 3 year USD bond at a final price guidance of 4.257%. The bonds is guaranteed by the Government of Singapore and the bond is rated high investment grade of AAA by S&P.
About Bayfront Infrastructure Management
Bayfront Infrastructure Management (“Bayfront”) was established in 2019 with a mandate to invest in and distribute project and infrastructure loans and bonds in the Asia Pacific and Middle East regions. It was established in connection with the Infrastructure Take-Out Facility (“TOF”) initiative for infrastructure debt in Asia.
100% of Bayfront’s ordinary shares is held by Clifford Capital Holdings and 100% of its preference shares are held by Asian Infrastructure Investment Bank. The shareholders of Clifford Capital Holdings comprises of Temasek, Prudential Assurance Company Singapore, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, DBS Bank and John Hancock Life Insurance Company (Manulife).
Bayfront also enjoys strong sponsorship from the Government of Singapore and the MAS. In April 2020, the Government of Singapore, through the Ministry of Finance, entered into a guarantee framework agreement with Bayfront to provide a USD 2.0b guarantee comprising of USD 1.8b principal and USD 0.2b interest limits in respect of Bayfront’s debt instruments, loans or other credit or liquidity facilities. Therefore, debt instruments issued by Bayfront will benefit from a guarantee provided by the Government of Singapore.
Financial Highlights
Bayfront acquires brownfield project and infrastructure loans from financial institutions and will warehouse and manage these loans with the objective to distribute securitized notes or debt instruments to investors in the public markets. Bayfront will package these loans into Infrastructure Asset backed Securities to distribute it to institutional investors. Bayfront has a memoranda of understanding with a group of 26 banks that provide infrastructure loans for Bayfront to warehouse in their balance sheets. Some of the banks are DBS Bank, OCBC Bank, HSBC, Barclays and Citi.
For the financial year ending 31 December 2022 (“FY22”), Bayfront had USD 1.3b of loans while borrowings amounted to USD 1.2b. Interest income from loans generated USD 48.2m while interest expense from borrowings was USD 28.4m. As a result, profit for the year amounted to USD 6.2m after accounting for staff costs and operating expenses. Among its loans portfolio, 55% of loans were to companies located in the Asia Pacific while Middle East made up 26% of its loans portfolio.
BAYFIM 4.257% 16May2026 Corp (USD)
The BAYFIM 4.257% 16May2026 Corp (USD) was priced at CT3 + 55 bps at its final price guidance. The bond has a tenor of 3 years and is unconditional and irrevocably guaranteed by the Government of Singapore. Due to the strong guarantee by the Singapore Government, the notes are rated AAA by S&P.
One of the notable features of this bond is the automatic redemption in the event of a missed payment. Prior to the maturity date, if the issuer has missed payment on its coupons or principal amount, then the guarantor will redeem the notes in full.
We think the BAYFIM 4.257% 16May2026 Corp (USD) is an attractive option for investors who are seeking an alternative to US government bonds. The bonds provide a yield pick-up of 55 bps while also having high investment grade ratings. This note provides the best of both worlds as investors can invest in higher yields from USD-denominated bonds while also enjoying a strong government guarantee from the Singapore government.
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a position in BAYFIM 4.257% 16May2026 Corp (USD) and the analyst who produced this report holds a NIL position in the abovementioned securities.
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