Frasers Property Treasury Launches Tender Offer for Its 4.15% Notes Due 2027

Frasers Property Treasury (FTP), guaranteed by Frasers Property Limited (FPL), has invited holders of its 4.150% notes due 23 February 2027 to tender their notes.

Noteholders who participate must elect one of two settlement options, which will apply to their entire holding:

Option #1 – Cash Settlement: Existing notes will be purchased entirely for cash at par (100% of principal), plus accrued interest.

Option #2 – New Notes Settlement: Existing notes will be purchased at par, with 97.5% of the purchase price used to subscribe for new SGD notes due 2037 at an issue price of 97.50%. The remaining 2.5% will be paid in cash. The new notes will carry a coupon of "not less than 3.50%", with the final coupon rate to be determined upon pricing.

The invitation will expire at 5.00pm on 9 September 2026, with settlement expected around 17 September 2026.

Financial Performance

FPL's revenue for 1H2026 came in at S$1.5 billion, down 5.2% YoY from S$1.6 billion. The decline was mainly due to the absence of contributions from Sky Eden @ Bedok following its completion in September 2025, partly offset by higher contributions from its Singapore retail portfolio.

PBIT rose 13.2% YoY to S$678.7 million, supported by residential projects in Singapore, Australia and China, industrial land sales in Thailand, and higher retail contributions. Recurring-income assets accounted for approximately 76% of PBIT in 1H2026.

As of 31 March 2026 (1H2026), the group held more than S$2.0 billion in cash and cash equivalents, against S$18.1 billion in loans and borrowings. With total assets of S$40.0 billion, total debt-to-total assets stood at 45.1%.

Net debt was approximately S$16.1 billion. Against total equity of S$17.1 billion, net debt-to-total equity worked out to 94.2%, up from 89.3% at FY2025, which ended on 30 September 2025. Based on FPL's preferred leverage metric, net debt-to-property assets similarly increased from 43.7% in FY2025 to 45.5% in 1H2026.

On a trailing-12-month (TTM) basis, EBITDA fell 7.4% YoY to S$1.3 billion, from S$1.4 billion a year earlier. Against net debt, TTM net debt-to-EBITDA increased to roughly 12.7x from 11.1x a year earlier. TTM interest expense rose 4.2% to S$582.2 million, while interest coverage declined to 2.2x from 2.4x in 1H2025.

Potential Outcomes for Noteholders

Calculation Assumptions

1. Holding of one full lot of bonds (S$250,000 principal).
2. Accrued interest is calculated using the Actual/365 day-count convention, as stated in the pricing supplement for the 4.150% notes due 23 February 2027.
3. We assume a 3.50% final coupon, though the actual coupon is not yet determined but will be “not less than 3.50%”.

Option #1: Cash Settlement

As shown in Table 1, bondholders who choose the cash settlement option would receive approximately S$250,711 in cash upon settlement.

This consists of:

1. Accrued interest at the 4.15% coupon up to 17 September 2026.
2. Repayment of 100% of principal on 17 September 2026.

Effectively, bondholders would receive their principal 5 months early but forgo coupon accrual between the September 2026 tender settlement and February 2027 bond maturity.

Table 1: Indicative cashflow if bondholders choose cash settlement

Date	Type	Rate	Amount
17-Sep-26	Interest (accrued, 25 days)	4.15% coupon	$711
17-Sep-26	Principal	100% of principal	$250,000
	Total		$250,711

Option #2: New Notes Settlement

For bondholders that pick the new notes settlement option, they will receive a total of $6,961 in immediate cash upon settlement, plus $250,000 in principal amount of new notes due 2037 (see Table 2).

This consists of:

1.      17 September 2026: Accrued interest on the existing notes at the 4.15% coupon

2.      17 September 2026: Cash portion of the purchase price, at 2.5% of principal

3.      17 September 2026: Issuance of $250,000 principal amount of new notes due 2037, subscribed at 97.50% of face value (a cost basis of $243,750)

Table 2: Indicative proceeds under new notes settlement option

Date	Type	Rate	Amount
17-Sep-26	Interest (accrued, 25 days)	4.15% coupon	$711
17-Sep-26	Cash Portion	2.5% of principal	$6,250
17-Sep-26	New notes	97.5% of principal	$250,000 (face value)
	Total		$256,961
	Immediate Cash		$6,961

Option #3: Hold to Maturity

If bondholders decide to hold to maturity, the total cashflow received will be around $255,230 upon maturity in February 2027 (see Table 3).

This consists of:

1.      23 February 2027: Coupon payment at 4.15%

2.      23 February 2027: Principal repayment (100% of principal)

Table 3: Indicative cashflow if bondholders choose to hold to maturity

Date	Type	Rate	Amount
23-Feb-27	Interest (184 days)	4.15% coupon	$5,230
23-Feb-27	Principal	100% of principal	$250,000
	Total		$255,230

Option Comparison

Tendering for cash is not attractive. Bondholders would simply be forfeiting the final coupon accrual to maturity for no compensating pickup, given the tender price of par (100%) offers no premium over what will be received holding to maturity. Working the numbers: $255,230 ÷ $250,711 = 1.80% non-annualised return for holding the extra 159 days to maturity, which annualises to roughly 4.1% (1.80% ÷ 159 days × 365 days) - so holding effectively earns bondholders about 4.1% versus tendering for cash today. This is made even less attractive by the bonds currently trading around 100.500 in the secondary market (meaningfully above the par tender price) so bondholders wanting to exit now would be better off selling into the secondary market rather than tendering. Hence, we do not recommend this option.

Assuming the new notes are priced at the minimum coupon of 3.50%, the issue price of 97.50 implies an indicative yield to maturity of 3.79%. This reflects the incoming coupon payments, and the fact that investors are effectively purchasing the new 2037 bonds below par.

Against the current 10-year Singapore Government Securities yield of around 2.41%, this represents a pickup of approximately 138bps.

Compared with FPL's existing FPLSP 3.500% 28Aug2036 bond, which is currently trading at a yield of 3.47% and has a broadly similar tenor, the new notes offer a comparatively modest pickup of approximately 32bps.

As shown in Table 4, the new notes also offer a yield pickup of approximately 87bps over MAPLSP 3.688% and 60bps over HKLSP 3.950% 28Nov2038, the latter of which is rated A by S&P.

Table 4: Peer Comparison

Issuer	Issue	Credit Rating (S&P / Moody’s / Fitch)	Ask Price	Years to Maturity	Yield to Maturity (%)
Frasers Property Treasury	FPLSP 3.500% 28Feb2037 Corp (SGD)*	- / - / -	97.50	10.49	3.79
Frasers Property Treasury	FPLSP 3.500% 28Aug2036 Corp (SGD)	- / - / -	100.24	9.99	3.47
Mapletree Treasury	MAPLSP 3.688% 24Jun2036 Corp (SGD)	- / - / -	106.48	9.81	2.92
HK Land Treasury	HKLSP 3.950% 28Nov2038 Corp (SGD)	A / - / -	107.69	12.24	3.19
Data as of 3 September2026 Source: Bloomberg

Our recommendation

While the indicative yield of approximately 3.79% offers a reasonable pickup over both the risk-free rate and most comparable peers, the new notes come with the trade-off of significantly longer duration. FPL's credit profile remains relatively solid as the group continues to shift towards a more recurring-income-oriented portfolio, although leverage remains elevated.

Therefore, the new notes settlement option may be reasonable for investors who are comfortable maintaining exposure to FPL for more than a decade at an indicative yield of around 3.79%. Investors should note the significantly greater duration risk and credit risks that come with a holding period of 10+ years.

For investors who do not want the longer-duration exposure, we would recommend holding the existing notes to maturity in February 2027. In our opinion, holding to maturity is superior to cash settlement. 

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds NIL positions and the analyst who produced this report holds NIL positions in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report — including all investment theses, ratings, price targets and conclusions — has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.