Seems I have corporate bond vigilante blood in my veins.  This is an unsolicited post of my opinion so DON’T SUE ME !


What a way to reward current bond holders by throwing in a change of control clause (Temasek) for the new issue ! and a wider spread too.

Must be a VIP anchor buyer calling the shots (hearing SGD 100 mio) because SGD 400 mio is not that easy to sell for that name these days. (Hearing SGD 500 mio in orders now – must be the CoC)

(Do note that the NOL Perp has fizzled with an empty ticker on Bloomberg – so close and yet so far ?)

Current issues.

1. NOLSP4.65 09/2020 SGD 280 mio (250k/250k)

Issued Sep 2010 nc 5Y Call Price 102.33

Issue Spread SOR+180 bp

Current Price 100.25/101.45

2. NOLSP4.4 06/2021 SGD 300 mio (250k/250k)

Issued Jun 2011 nc 5Y Call Price 102.20

Issue Spread SOR + 225 bp

Current Price 98.20/99.70

The New Issue Details

  • 4.25% (SOR + 308 bp)
  • 5Y Senior SGD 400 mio (250k/250k)
  • Change of Control Step Up : 150 bp if notes are not redeemed within 60 days of CoC.

Situational Analysis

DUMP the Old !!  And Buy the New !!

Or DUMP the Old and DON’T BUY THE NEW  ?

Either way, it looks like DUMP the OLD. Because the market will be two-tiered from here for the new vs the poor old issues of 2010 and 2011.

I never liked NOL for personal reasons, having started my career with a BAD BAD BAD EXPERIENCE with NOLSP4.08 06/2008 (SOR+63 bp).

Questions to ask ourselves right now are :

  • Why are they trying so hard to pay up now when they have never been generous before ?
  • Is 150bp as a step up good enough for a loss making company ? (even the mighty Maersk is floundering)

With 4 leads, I will not be surprised if this is going to be pushed out to retail again.

With luck, a small profit but I see tears when people try to sell this stuff to buy the Hutch perp coming next.

[This first was first published in]