Bonds In Conversation Is Back and Sitting Pretty + Tata Intl New Issue Review
2 weeks and everything is sitting pretty while I was gone.
No new issues in SGD unless you want to count that BOC 1Y deal. Hearing the market is lining up for another “nameste” issue in Tata again and possibly CWT, no further information available on CWT at this time.
One Tata is not another Tata. This Tata International is a privately held company, majority owned by Tata Sons Ltd which is rated AAA by ICRA and CRISIL in India. Tata International is rated AA- by ICRA (a local Indian credit rating agency).
Deal details SGD 50 mio for starters, 4.5% cpn for 5Y.
Tata Communications 02/2016 is going pretty tight in the market with banks showing between 101.35 to 101.75 bids and offers between 101.875-102.50.
Tata International has to pay up because private companies have no public accounts and thus, there is little transparency in their business. I would be tempted to say it is probably sitting on higher grounds than Tata Communication by just the business model and their closer association to the mothership – Tata Sons. Yet 4.5% is not a screaming hot buy or decent enough pick up over Tata Comm (3.5% offer for 1Y shorter) and EXIMBK 09/2017 (at 3%).
I would be surprised if any leverage will be accorded by the banks out there for the purchase of this bond. Unless you have some superior information on privately held Indian companies, it is probably safer to sit this one out.
Back to business in SGD bond space.
Stocks sitting pretty, bonds sitting pretty and USDSGD thronging to and fro around the 1.24 handle, as our headaches on the increasingly erratic behaviours of central banks develop into full blown migraines.
Fret not, we will have the MAS Monetary Policy Statement out next Friday for some excitement in our lives and the cliff hanger of a potentially recessionary GDP.
My presumption of the lack of activity in Singapore bond space is based on my assumption that everyone is sitting pretty scared and confused right now as global markets continue on a disconnected rampage off all tangents.
Thus the most likely result would be missing the ride up and the ride down back to square one eventually just as this interesting article I append here for your reading pleasure.
What No One Tells You About A Market Rally
Leaving you with the usual prices (all unverified).
2012 BENCHMARK ISUES
And 2013 New Issues
Till same time next week !!
This morning my RM called to say there were two new issues about to come to the market……
1. Goodpack 10 years 4.3/4% coupon (yes …… another tranche of 10 year stuff from Goodpack – I see the price of the existing 10 year notes which are due to mature January 2013 is a tad below 100).
2. Swiber (yes yet more Swiber paper, presumably to deal with their substantial Q3 2013 debt maturities) 4 years 7.1/4% coupon.
I have informed my RM that I will not go into either.
Glad we are on the same side for Swiber ! And you are a Swiber supporter too ! What a blow it must be for them.
Have a great day !
Thank you Tradehaven,
Yes I hold some short-duration Swiber bonds, some maturing in ~ 4 months time. But a) I didn’t like the accounts discrepancy disclosure last week and b) this coming quarter and how they deal with paying off maturing debt is going to be interesting.
Any views on the Goodpack 10 year issue? Presumeably same as their January 2013 offer? Why would I pay ~ 100.25 for 4.75% debt maturing in April 2023 when I can buy in the market day 4.75% paper maturing three months earlier at ~ 100.00? I do not see any difference in the subordination ranking or other key terms. I’m obviously missing something.
Take care, JC
They have come along way from issuing 3Y at 4% to now 10Y at 4.75%.
Its a good company with pedigree investors. What I suppose they are doing is to borrow opportunistically covert amounts of whoever who is willing to buy (assume this is a rev enquiry for perhaps a family office or trust) their paper at that yield which explains the Jan issuance of 30 mio, because they could not get any more interest at that level.
I think its expensive at 4.75%. Might as well take the risk and buy NOL bonds with Temasek backing.
What do you think of Unicredit? Still too risky? Any comments would be appreciated.
Unicredit CEO “confiscate savings to save banks”
Do not know if savings include bond holders ? Same ranking in times of default right ?
My god! This doesn’t sounds right. Better to stay clear of Euro banks for the time being. Thanks!