DBS Bank Announces The Launch Of The Largest Single Commercial Property Asset Securitisation In Singapore

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Securitisation of 55% of Raffles City (Private) Limited

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Comprises Two Classes Of Bonds Totalling S$ 984.5 M

SINGAPORE, JUN 4 - DBS Bank today announced the launch of the single largest commercial property asset securitisation issue of S$984.5 million. These bonds are issued in conjunction with Raffles Holdings Ltd's sale of 55% of Raffles City (Private) Limited (RCPL) which owns Raffles City Complex, to Tincel Limited (`Tincel'). Tincel is a special purpose vehicle and its ordinary shares are held by Bermuda Trust (Singapore) Limited on behalf of a charitable trust.

Tincel will issue S$984.5 million bonds together with 29,550 Preference Shares at S$0.10 each to fund the purchase of the 55% stake in RCPL. The purchase price is based on a valuation provided by Knight Frank of S$1,790 million for the whole Raffles City Complex.

There are two classes of bonds, S$689 million Senior Bonds and S$295.5 million Junior Bonds together with 29,550 preference shares ('the Bonds'). The broad terms of the two classes of Bonds ar

Senior Bonds

The 10-year Senior Bonds are offered at par with a coupon of 5% per annum payable semi-annually. DBS Bank is setting aside S$50 million of the Senior Bonds for offer to retail investors. Depending on retail demand, DBS Bank has the option to increase the offer amount up to S$100 million. Applications are invited in multiples of S$10,000 subject to a minimum of S$10,000 and a maximum of S$5 million per applicant.

The remaining S$639 million Senior Bonds will be offered by way of placements to institutions and sophisticated investors through DBS Bank , DBS Securities and Vickers Ballas.

The Senior Bonds will be available from Tuesday June 5, (9.30am) to Tuesday June 12, 2001 (12 noon) or immediately upon full subscription. Retail investors can purchase the Senior Bonds at DBS/POSB ATMs on a first-come-first-served basis.

Junior Bonds

The $295.5 million 10-year Junior Bonds have a coupon of 7.4% per annum payable semi-annually. Every $10,000 in principal amount of Junior Bonds are attached with one preference share of S$0.10 in Tincel. These Preference Shares are not detachable and must be traded together with the Junior Bonds.

The Junior Bonds cum Preference share will be offered by way of private placements to institutions and sophisticated investors in multiples of S$250,000. After 6 months from the date of issue of the Junior Bonds, the Junior Bonds may be offered or sold to any member of the public in Singapore in board lot sizes of S$10,000 each.

In addition to the 7.4% coupon, Junior Bond holders are also entitled to any profit from Tincel and any capital appreciation that may be realised in the sale of the RCPL shares or the property or upon refinancing. These excess cashflows and capital appreciation will be paid via preferential dividends on the Preference Shares or redemption premium on the Junior Bonds. The Junior Bonds have a higher coupon and returns as they are subordinated to the Senior Bonds and assume a higher risk.

The Senior & Junior Bonds

The Bonds are secured by the 55% shares in RCPL with the Senior Bonds ranking ahead of the Junior Bonds.

Cashflows for payment of the coupons are derived from the leases of the Raffles City Complex. The Senior Bonds which rank ahead of the Junior Bonds, have first claim over the cashflows for coupon payments and principal repayment. The principal repayment is dependent on the valuation of the Complex and on the sale of the underlying asset or the refinancing of the Senior and Junior Bonds

The Senior Bonds and the Junior Bonds with the Preference Shares attached will be listed and can be transacted on the Singapore Exchange. DBS Bank will also use its best endeavour to make a market for both the Junior and Senior Bonds subject to certain trading and exposure limits. Retail investors can buy and sell the Senior Bonds at all DBS branches.

As the Senior and Junior Bonds are `qualifying debt securities' , for tax paying corporates, the interest income is taxed at a concessionary rate of 10%. Individual investors are subject to tax at their respective tax brackets.

The above Bonds are not bank deposits nor are they insured or guaranteed by DBS Bank or its respective affiliates and are subject to investment risk. Investors are therefore advised to read the Investment Considerations in the Prospectus.

The Property

Raffles City Complex is one of Singapore's landmark buildings located in the heart of the Central Business District. It comprises The Stamford and The Plaza Hotels, the Raffles City Convention Centre, Raffles City Tower and Raffles City Shopping Centre. Raffles City Complex is strategically located next to the City Hall MRT Station, one of two major underground train interchanges within the city centre.

Raffles City Complex is a leasehold property with remaining lease of 78 years.

The hotel & convention centre will be leased back to RC Hotels Ltd (the 'Hotel Lease'), an associated company of Raffles Holdings. Raffles International Ltd, 100%-owned subsidiary of Raffles Holdings, is responsible for the leasing of the retail and commercial areas, managing the tenant mix as well as marketing and promoting Raffles City Complex.

Eric Ang, Managing Director and Joint Head of DBS Bank's Investment Banking Group said, "We are very pleased to lead manage this deal, which is the largest single commercial property asset securitisation in Singapore. The bonds are backed by the cash flow and property value of Raffles City Complex, one of Singapore's premium properties. By making the Senior Bonds available via the ATMs, retail investors can also participate in an investment providing a stable return of 5% per annum. Investors are encouraged to find out more in the prospectus."

"This issue follows several other firsts for DBS in the area of corporate bond issues. In 2000, DBS launched Moneyplus - Singapore's first short-term interest bearing notes. DBS joint-lead managed the two largest issues in 2000 for the Port of Singapore Authority Corporation and in 2001 for the Singapore Telecoms. We have also recently completed the S$1.1 billion DBS Preferred Investment Issue. DBS Bank is the first to pioneer asset securitisation in Singapore and today remains the market leader in this field."

The offer of the above securities will be made in, or accompanied by, a copy of the Prospectus dated June 2, 2001 issued by Tincel. Anyone wishing to acquire these securities will need to make an application in the manner set out in the Prospectus.