DBS Bank will on Monday embark upon a global roadshow for a debut covered bond issue after yesterday (Tuesday) unveiling a $10bn (Eu8.88bn, SGD13.4bn) programme, the first from Singapore, which the issuer said will offer it greater cost efficiency.

The Monetary Authority of Singapore (MAS) laid the foundations for issuance by publishing a covered bond notice on the last day of 2013, then at the beginning of this year the regulator proposed amendments to the framework that were only completed the week before last, on 4 June.

“As Singapore’s largest bank and a leading bank in Asia, we are committed to pioneering capital market developments that bring value to both issuers and investors,” said DBS chief financial officer Chng Sok Hui. “Market participants in Asia and globally are eagerly anticipating the opening of the Singapore covered bond market and we are proud to inaugurate it.

“For DBS, the programme enables us to engage a fresh group of investors and to access liquidity with greater cost efficiency. This will lower our overall funding cost. Subject to market conditions, we look forward to launching our first issue of covered bonds in US dollars or euro, targeting institutional investors.”

DBS’s programme is arranged by DBS and Barclays, and also appointed as dealers are Citi, Deutsche, JP Morgan, Société Générale and UniCredit.

The issuer will next week embark upon its roadshow, which it said will introduce the programme to the international investor base. DBS, Deutsche, JP Morgan and SG are coordinating the roadshow, which will begin in Singapore on Monday before taking in Hong Kong, the US and Europe until 3 July. DBS will have 144A documentation available for dollar issuance.

DBS Bank’s senior unsecured debt is rated Aa1/AA-/AA- and the covered bonds are expected to be rated triple-A. The issuance will be backed by residential mortgages against properties in Singapore.

Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB), DBS’s two largest Singaporean peers, are expected to follow it into the covered bond market.