City Developments Limited Launches S\$2 Billion Multicurrency Perpetual Securities Issuance Programme

City Developments Limited (CDL) has announced the establishment of a significant S\$2,000,000,000 Multicurrency Perpetual Securities Issuance Programme on 9 April 2026. The programme, arranged and managed by United Overseas Bank Limited, represents a major step in the company’s ongoing capital management and funding strategies.

Key Highlights of the Programme

• Programme Size and Flexibility: CDL has created a framework to issue up to S\$2 billion in perpetual securities, allowing issuances in Singapore dollars or other currencies as agreed with the dealer. The flexibility in currency and amount enables the company to tap various investor bases and adjust to market conditions.
• Target Investor Base: The securities will be offered exclusively to institutional and accredited investors under Singapore law, ensuring that the issuance targets sophisticated market participants.
• Perpetual Structure: The securities do not have a fixed maturity date, meaning CDL can keep these on its balance sheet indefinitely, subject to the terms of each issuance. This structure enhances the company’s capital base without near-term repayment obligations.
• Distribution Terms: The Perpetual Securities may bear either fixed or floating rates of distribution. Furthermore, CDL may, if specified in the pricing supplement, defer distributions at its option, allowing further flexibility in cash flow management.
• Seniority and Ranking:
  • Senior Perpetual Securities: These will be direct, unconditional, unsubordinated, and unsecured obligations of CDL, ranking pari passu with other unsecured obligations (except for subordinated obligations and statutory priorities).
  • Subordinated Perpetual Securities: These will be direct, unconditional, subordinated, and unsecured obligations, ranking equally among themselves and with any other parity obligations of CDL.
• Use of Proceeds: The funds raised through this programme (net of issue expenses) are earmarked for the general working capital and corporate funding needs of CDL and its subsidiaries, as well as to refinance existing borrowings. This may improve CDL’s liquidity, potentially lower funding costs, and support ongoing and future business operations.
• Listing on SGX-ST: CDL has applied to list and quote the Perpetual Securities on the Singapore Exchange Securities Trading Limited (SGX-ST), subject to approval. However, the SGX-ST’s approval is not an indication of the merits of CDL, its subsidiaries, or the securities.

Important Considerations for Shareholders

• Potential Impact on Share Value: The launch of this large-scale perpetual securities programme can be price-sensitive, given its size and the flexibility it provides CDL to strengthen its balance sheet, manage liquidity, and refinance debt. The ability to defer distributions may also impact cash flow and financial ratios, which investors should closely monitor.
• Capital Structure and Leverage: The issuance of perpetual securities, especially when classified as equity for accounting purposes, can improve leverage ratios and provide financial flexibility. However, the cost and terms of each issuance (e.g., distribution rates, deferral rights) will affect overall funding costs and risk profile.
• Investor Base and Market Confidence: By targeting institutional and accredited investors and seeking SGX-ST listing, CDL demonstrates its intent to maintain market transparency and access to a broad investor base, which may influence market perception and share price performance.
• No Immediate Dilution for Shareholders: As these are debt-like instruments (unless conversion features exist), there’s no immediate dilution of ownership. However, the terms and ongoing cost of servicing these instruments are important for future profitability and dividend distributions.

Conclusion

The establishment of this S\$2 billion multicurrency perpetual securities programme marks a significant development in CDL’s capital management strategy. The flexibility and scale of the programme position the company to proactively manage its funding, potentially enhance its balance sheet, and maintain liquidity through market cycles. Shareholders should monitor the terms and uptake of future issuances under this programme, as these could meaningfully influence CDL’s risk profile, interest coverage, and future returns.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. Investors should conduct their own research and consult with professional advisors before making any investment decisions. The information presented is based on public disclosures by City Developments Limited as of 9 April 2026 and may be subject to change without notice.

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