SGD NEW ISSUE REVIEW : NAM CHEONG 4Y
*** NEW ISSUE: NAM CHEONG SGD 4 YR ISSUE ***
Issuer: Nam Cheong Limited
Status: Direct, unconditional, unsubordinated and unsecured Notes
Rating: Unrated
Format: Reg S, S274 & 275 of Singapore SFA
Tenure: 4 Years
Issue Size: TBD
Payment: Semi-annual, actual/365 (fixed)
Details: SGD250K/MTN Programme/Singapore Law/CDP
Listing: SGX-ST
Timing: This week’s business, as early as today
– New Nam Cheong SGD 4yrs announced on the back of strong reverse interest
– Initial price guidance at low 5s
– Comps:
NCLSP 6 2015 4.66%
ASLSP 4.75 2017 4.67%
EZION 4.6 2018 4.48%
Credit highlights (taken from the leads) :
– Largest offshore support vessels (OSVs) builder in Malaysia. Nam Cheong is a leading offshore marine group in Malaysia specializing in the construction of OSVs, which are used to support the offshore exploration & production (E&P) activities of oil majors
– High orderbook and concentration on developing platform support vessels (PSVs) will drive growth. Orderbook of RM1.4 billion (as at 13 Aug 2013) will continue to drive financial performance and growth.
– Uniquely positioned to win Malaysia-based business. Nam Cheong stands to benefit from Malaysian cabotage laws that require vessel operating licenses to be granted only to Malaysian flagged vessels.
– Supportive underlying industry fundamentals. The group stands to benefit from Petronas’ RM300 billion capital expenditure plan. Nam Cheong’s close ties with Petronas-licensed companies will continue to give it a competitive edge in securing contracts.
– Nam Cheong continues to deliver strong financial results with nine consecutive quarters of profitability since May 2011 listing. For 2QFY2013’s robust vessel sales push Nam Cheong’s revenue 84% higher to RM275.3 million and net profit 83% higher to RM41.12 million.
The old Nam Cheong 6% 11/2015 did well and we have a new one today.
They are in a cushy spot of their game and generously paying as they did in 2012, a decent coupon especially if you compare with Oxley 4.75% 2018 and the rest of the recent issues.
This is the first recent debt paper issue where I received my full allocation, i.e. I got everything I applied for. Didn’t get zero. Didn’t get cut back to one lot. That’s probably NOT good news.
Final coupon 5.0% exactly. I understand the size was S$ 90 Million. I note that several of my other O&G Service Co. paper holdings were hit this week, i.e. including the shorter tenor stuff -ASL Marine, Ezion, Nam Cheong. Swiber paper is holding up but Ezra’s Perpetual is in the toilet.
Anyway ………….. Nam Cheong’s 4Y note pales into the shadow of the United Envirotech paper, IMHO.
Have a good weekend,
JC8888
It is not such a bad thing. At least they did not slash the coupon which is understandably tight for understandable reasons i.e. Nam Cheong cannot look bad compared to the Oxley and Aspial stuff that has been coming out.
The perps are a function of irresponsible banking, in my opinion. Issuing on leverage for some of them and now cutting back the bank’s lines (or having insufficient lines in the first place) which dries up the liquidity and causes forced sales in times of distress.