SGX secures $3.8 billion funding for ASX takeover

Going ahead with its plans to create Asia-Pacific's premier stock exchange, the Singapore Exchange Limited (SGX) yesterday secured long-term funding of approximately $3.8 billion from an international banking consortium to acquire Australia's primary stock exchange group Australian Securities Exchange Limited (ASX).

The senior term loan consisting of S$3.8 billion ($3 billion) and A$750 million ($746 million) will come from six major banks - Australia and New Zealand Banking Group Limited, The Bank of Tokyo-Mitsubishi UFJ Ltd, Singapore Branch, DBS Bank Ltd, Overseas-Chinese Banking Corporation Ltd, United Overseas Bank Ltd and National Australia Bank Ltd, SGX said in a statement.

The Asian stock exchange major had disclosed its intention to merge with its Australian counterpart by offering $8.2 billion in a cash and stock transaction earlier in October. (See: Singapore Exchange offers $8.2 billion for Australian Securities Exchange)

The proposed merger of the two stock exchanges would create one of Asia-Pacific's largest bourses with a market capitalisation of around $14 billion.

The new entity would continue to operate out of Australia and Singapore, maintaining their existing brands, and according to analysts' estimates, would have access to a combined $2-trillion securities market.

Both the financing facilities will be sub-divided into two equal tranches of tenors 3 years and 5 years.

The Singapore dollar facility will carry an interest rate based on the relevant S$ swap offer rate plus a margin of 0.55 per cent per annum for the 3-year loan and 0.72 per cent per annum for the 5-year loan.