Merrill wins SingTel auction

Merrill wins SingTel auction

HONG KONG (Reuters): Merrill Lynch has won an auction, beating five other investment banks, to sell US$440 million of Singapore Telecommunications Ltd bonds, sources close to the deal said on Wednesday.

"Basically, Merrill had to bid in an auction along with five other houses and bought them from Cable & Wireless and then we sold it out," a source at Merrill Lynch told Reuters. "It was a forward sale of SingTel bonds."

Cable and Wireless will receive the bonds as a result of SingTel's $9 billion acquisition of its Cable & Wireless Optus Ltd business.

Traders said formal pricing of the bonds, which were sold in two tranches of $220 million each, took place in New York on Tuesday.

The five year bonds were priced at 55 basis points over Libor and the seven year bonds were placed at 65 basis points over Libor.

The pricing implied a 25 bps pick up for Cable and Wireless.

Cable and Wireless had got the five and seven year papers at 80 and 90 bps over Libor, the source said.