Newly-launched Clifford Capital says it has "decent pipeline" of projects

Newly-launched Clifford Capital says it has "decent pipeline" of projects
By Linette Lim | Posted: 22 November 2012 2350 hrs
     
SINGAPORE: Specialist finance firm Clifford Capital launches its operations Thursday on a firm footing.

The company, backed by a consortium of shareholders that includes Temasek Holdings, DBS Bank, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, Manulife through its unit, John Hancock Life Insurance Company and Prudential Assurance Company Singapore, said it already has a "decent pipeline" of transactions which are spread across broad geographic regions.

The firm, which provides financing to Singapore corporates in bidding for large, long-tenor projects overseas, expects to operate at a steady state within the next two to three years.

Tharman Shanmugaratnam, Singapore Deputy Prime Minister and Finance Minister, Chairman at Monetary Authority of Singapore said: "We are well placed -- the community here, of financial institutions, multilateral development institutions, government working together with Clifford Capital and professional specialists -- we are well placed as a community in Singapore to help to catalyse the development of infrastructural finance in Asia and beyond."

The company aims to have 80 percent of its portfolio comprising projects that involves Singapore-based firms.

These refer to companies listed or incorporated in Singapore with a material presence in the city state.

In turn, the Singapore government will back debt instruments issued by Clifford Capital with a guarantee.

Clive Kerner, CEO of Clifford Capital said: "The debt is guaranteed by the government of Singapore, which is in turn, triple A.

"If you compare that situation with many of the banks in the world at the moment, I'm not sure there are any banks that actually have triple A credit rating, so what that will do is give us a very low cost of funding and we think we'll be able to pass that benefit on to our clients in the form of attractive financing solutions."

Over the next decade, the Asian Development Bank estimates that there will be about US$8.3 trillion worth of infrastructure investment in Asia.

But at the same time, the cost of funding these investments is up.

Ray Ferguson, CEO of Standard Chartered Bank Singapore said: "The rules around Basel III and banks make long term financing harder for banks to provide, particularly financing beyond the sort of five-year level, because it's very difficult for us to get matching deposits.

"So Clifford can come in take the longer term tranches of some of those deals."

For a start, Clifford Capital will focus on financing the infrastructure and offshore and marine sectors with an average deal size of US$50 to US$100 million.

These are the sectors which Singapore firms have the competitive advantage.

- CNA/lp


- wong chee tat :)