DBS Bank in Singapore recently launched its third quasi-CMBS deal this year. The S$184 million ($109 million) transaction arranged for property developer DBS Land is backed by income from its office building in the central business district on 268 Orchard Road, which will be leased back to DBS Land for 10 years.
An SPC called Baronet issued 10-year secured bonds priced at 6%, split into a S$30 million tranche for retail investors and a S$90 million institutional tranche. Both tranches were heavily oversubscribed, said a DBS banker.
DBS Land kept S$64 million of the bonds. No ratings were required, since the issue was entirely placed in Singapore which is a very small market, she explained. DBS also provided investors with guaranteed coupon and principal redemption at maturity, and the chance to share in any gains from the sale of the building, the banker added.