New Issue Review : Ezra Holdings 5Y SGD


Issuer: Ezra Holdings Limited

Status: Direct, unconditional, unsubordinated and unsecured Notes

Rating: Unrated

5 Years

Use of proceeds: Mainly for refinancing the existing borrowings of the Issuer and its subsidiaries (“Group”) and remaining for financing general working capital and general corporate purposes of the Group

This week’s business, as early as today – Ezra new SGD issue announced on the back of strong reverse inquiries –

Tenure: 5 yrs –

Cpn : 5% area

Comps: –
EZRASP5 15: 101.75, 4.22%
EZISP5.25 15: 102.50, 3.99%
ASLSP4.75 17: 100.75, 4.54%

Nearly skipped this one – BORING ! But lets take a look at them for good order’s sake, as if anyone bothers to read this because the order books at >150 mio as we speak and the coupon will be <5%.

They have neatly excluded the new Swiber 7.125% 4Y (trading now 101/101.75) as a comparable. Swiber is smaller at 366 mio mkt cap vs Ezra’s 978.8 mio. Both are trading at 6 month lows for their equity. Ezra’s earnings had a miss yesterday and has been cut to underweight by some brokerages.

Ezra is less leveraged but is 5% or less good enough ? It is all about the pricing.

Hmmm. I suggest people look closer to home. At the Ezra 8.75% perpetual which is callable in 09/2015 and offered at 96.00 (10.65%) today.

This perpetual is cumulative and compounding. It is not as secure as Swiber’s senior perpetual and its price has suffered along with the SGD perp contagion and market re-positioning in Q1.

Questions to ask – is the price good enough ? Under 5% would be the cheapest they have paid for 5 year money.

Ezra Holdings Ltd 8.75 PERP CALL 09/2015 150 MIO SGD 95 96 11.40% 10.65%
Ezra Holdings Ltd 5 07-Sep-15 200 MIO SGD 101.25 102.3 4.33% 4%
Ezra Holdings Ltd 4.78 21-May-13 50 MIO SGD 100 100.2
Ezra Holdings Ltd 4 25-Nov-14 100 MIO USD 98.574 99.57