DBS Bank has raised over S$1bn from its DBS Global Income Note in the three months since its January launch, with its private banking clients showing strong interest, South-east Asia's largest lender announced.
"As the hunt for yield continues to dominate in a lower-for-longer environment, the note presents a timely solution for income investors seeking capital preservation and a stable, consistent source of income," DBS said in a statement.
The open-ended note references the DBS Global Income Portfolio, a globally diversified and equally weighted portfolio of at least 100 mostly investment-grade bonds, across various geographies and sectors.
Demand for the DBS Global Income Note has been exceedingly strong"
It has a current payout of around 4.25% per annum in USD, and provides high income visibility and transparency as it pays out coupons collected (less structuring fees and costs) to investors on a quarterly basis. It is also available in an SGD-hedged format. The minimum investment sum is USD 50,000 or SGD 100,000. In comparison, the minimum trade size for a single non-retail bond is SGD 250,000.
Audra Seah, head of investment advisory and capital markets at DBS Private Bank said: "With the hunt for yield remaining a consistent theme amid falling interest rates, narrowing credit spreads, and the inverted yield environment we're seeing today, we believe the launch of the DBS Global Income Note is timely.
"Demand for the DBS Global Income Note has been exceedingly strong.We structured the DBS Global Income Note to address income investors' need for greater stability and certainty by providing access to a highly diversified fixed income portfolio, for a relatively small investment amount."
The note is structured by DBS' investment advisory and capital markets team, with the underlying portfolio of bonds selected based on DBS CIO's investment guidance and target duration, and the credit research expertise of DBS Group Research and DBS fixed income analysts.
Click here to subscribe to International Investment's free twice-daily newsletter