The Credit Cheatsheet – No better deal than this Astrea USD paper

• In the March meeting, the European Central Bank (“ECB”) announced the decision to lower the three benchmark rates by 25 basis points, with the key deposit facility rate down from 2.75% to 2.50%. ECB’s President, Christine Lagarde, highlighted that disinflation has progressed well while the monetary policy has been meaningfully less restrictive with previous cuts. On the other hand, the ECB acknowledges the uncertainty over trade policies and will continue to follow a data-dependent approach for the upcoming decisions. 
  
  
• The Bank of Japan (“BoJ”) kept the key policy rate at 0.5% in the March meeting. The unanimous decision by the board had been expected by the markets. The meeting statement reflects a moderate economic recovery, despite some areas of persistent weakness. Particularly, the board expressed concerns about "high uncertainties" affecting Japan's economic activities and pricing, regarding trade dynamics and domestic wage-setting practices.
  
  
• The Federal Reserve decided to leave the Federal Funds target range unchanged in the March meeting, with the rates kept between 4.25% to 4.50%. The Federal Open Meeting Committee noted that inflation remains somewhat elevated, whereas the uncertainty surrounding the economic outlook has increased recently. Meanwhile, the Fed has opted to slow the pace of decline in its securities holdings starting in April, reducing the monthly redemption cap on Treasury securities from USD 25b to USD 5b. 
  
  The Fed remains committed to achieving maximum employment and returning inflation to the targeted 2%. Policymakers still project two potential rate cuts in 2025, despite revising economic growth projections downward and increasing inflation forecasts in this meeting. The decision reflects a cautious approach amid concerns about the impact of tariffs on the economy and inflation.
  
  
• In the March meeting, the Bank of England (“BoE”) maintained the policy bank rate at 4.5% in a majority 8-1 vote, reflecting a strong consensus among the members. The BoE highlighted a spike in inflation, with CPI inflation rising to 3.0% YoY in January, up from 2.5% in December. It also expects CPI inflation to rise further in the near term, to possibly 3.75% in 3Q25. The BoE emphasized a "gradual and careful approach" to future rate adjustments, as it continues to monitor changes in both the UK and global economy. 
  
  
• For the period from 21 February to 21 March, the 2-year Singapore Overnight Rate Average-Overnight Index Swap (“SORA-OIS”) decreased by 29 basis points to 2.2150%, the 5-year SORA-OIS decreased by 31 bps to 2.2625% and the 10-year SORA-OIS decreased by 27 bps to 2.4154%. 
  
  
• Over the same period, yields for the 6-month SGD T-bills fell to 2.50% while the 1-year SGD T-bills dipped by 32 basis points to 2.52%. The 5-year Singapore Government Securities decreased by 24 basis points to 2.50%, while the 10-year Singapore Government Securities decreased by 21 basis points to 2.66%. In the recent 6-month T-bills auctions, the bid-to-cover ratio were at a high, consistently above 2.50x levels over the past few auctions. We believe this helped push the cut-off yields down in the recent period, which saw the latest cut-off yield falling to 2.56% in the latest 13 March auction. 

Table 1
Covered new issuances over the past weeks

• 24 February – Olam Group Limited (“Olam”) announced the proposed sale of the remaining 64.57% stake in Olam Agri Holdings (“Olam Agri”) to Saudi Agriculture & Livestock Investment Company (“SALIC”). The proposed sale will be exercised through two tranches – with Tranche 1 being the sale of 44.58% stake in Olam Agri for approximately SGD 2.35b. SALIC will hold a controlling 80.01% stake in Olam Agri upon the completion of Trance 1.
  
  Subsequently, Olam will have a put option to sell the remaining 19.99% stake to SALC as part of Tranche 2. This would be exercisable on the third anniversary of the completion of the sale of Tranche 1. Correspondingly, SALIC will have a call option to buy the 19.99% stake in Olam Agri on or before the third anniversary of the completion of the sale of Tranche 1.
  
  
• 28 February – Hotel Properties Limited (“HPL”) announced an update regarding the charges against HPL’s Managing Director, Mr. Ong Beng Seng. HPL’s Board reflected that they have been made aware of Mr. Ong’s intention to plead guilty to one of the charges. Subsequently, HPL indicated that its Nominating Committee maintains the view that Mr. Ong continues to be suitable to carry out his duties and responsibilities as Managing Director.
  
  
• 12 March – City Developments Limited (“CDL”) announced that the court proceedings against various directors within CDL have been settled and will be discontinued. Mr. Kwek Leng Beng will continue in his role as Executive Chairman, while Mr. Sherman Kwek will continue in his role as the Group Chief Executive Officer. All existing directors will remain on the Board. 
  
  Additionally, in the official statement provided by Mr. Kwek, he highlighted that they have agreed to put aside their differences for the greater good of CDL and its stakeholders. They will continue to focus on strengthening CDL’s business, in accordance with good corporate governance and maximising shareholder value.
  
  
• 13 March – Singapore Post Limited (“SingPost”) announced that its shareholders have agreed on the proposed disposal of SingPost Australia Investment Pty Ltd, in turn which owns Freight Management Holdings Pty Ltd (“FMH”). The sale of FMH will help unlock strategic value for SingPost shareholders, which is expected to earn SGD 289.5m gain on disposal. The proceeds from the disposal will be used for debt repayment of approximately SGD 307.8m and a special dividend to be announced.
  
  At the same time, SingPost also announced an SGD 30m investment in the Regional eCommerce Logistics Hub facility, enabling the expansion of eCommerce processing capacity for future growth. The investment primarily consists of the installation of new sorting equipment, increasing the amount of small parcels to be processed per day by three-fold. In addition, it serves to free up significantly more floor space, allowing future enhancements.