Linklaters has advised DBS Bank on the establishment of a USD 10 billion global covered bond programme, a first for the Singapore market under a new covered bond regime.

Singapore released guidelines in December 2013 to permit the nation’s banks to sell covered bonds. Covered bonds are rated higher than unsecured debt, often attaining the coveted AAA rating, as investors have recourse to both the issuer and a portfolio of assets. Issuing covered bonds enables banks to reach investors in high-grade securities.

DBS and Barclays are Joint Arrangers of the programme. DBS, Barclays, Citigroup, Deutsche Bank, J.P. Morgan, Société Générale, and UniCredit Bank have been appointed dealers of the programme. A global roadshow is being coordinated to introduce the programme to the international investor base.

Net proceeds from the issuance of covered bonds will be used for the general business purposes of the DBS Group.

Andrew Vickery, Capital Markets partner at Linklaters, says: “Covered bonds are already a key funding tool for financial institutions throughout Europe and in Canada and Oceania. We are thrilled to be part of this new frontier for the product in Singapore. A huge congratulations to our friends at DBS for breaking the ice. We hope this programme paves the way for the establishment of similar funding programmes across Asia.”

The Linklaters team advising DBS was led by Capital Markets partners Andrew Vickery and Pamela Shores. The team also included US Capital Markets counsel Xavier Amadei, managing associates Alex Shopov and Hsiang Low and US associate Andrea Tompkins.

Linklaters also advised Kookmin Bank for the first covered bond programme under the South Korean covered bond law.