SGD New Issue Review : Guocoland 1Y – Bleh
Ill humoured day when you drop a candle on your foot and hurt exactly the matching toe that was stubbed 2 days ago on the other foot.
To top it off, we have this new Guoco 1Y at 2% and it is not even Friday the 13th.
ISSUER: GLL IHT Pte Ltd
GUARANTOR: GuocoLand Limited
STATUS: Senior Unsecured
FORMAT: Regulation S Bearer
ISSUE SIZE: S$150MM
TENOR: 1 Year Bullet
COUPON: 2.00% pa. s/a. on fixed rated basis
ISSUE PRICE: 100.00
ISSUE DATE: 1 October 2013
MATURITY DATE: 1 October 2014
DAY COUNT: ACT/365, Modified Following
DETAILS: S$250k by S$250k / Singapore Law / CDP / Unlisted
SELLING RESTRICTIONS: Under Section 274 and 275 of the Singapore SFA
Guoco is in a terrible hurry to raise money again. This is their 3rd issue this year and quite obvious they cannot get a better tenor than 1 year.
2% for 1 year ? when their 1.5 year paper is going at 3% ? Not exactly a bargain. And it looks like their refinancing needs will heavy into the next 2 years – SGD 1.5 bio excluding this issue.
But I suppose there will be buyers. Afterall, the last issue which I heavily criticised at 4.5% was finally issued at 4.1% and buyers are happily sitting on losses of only 2 cts so far. The perp buyers are not as lucky, sitting on a 6% loss and the call in 2016 now looking a bit dicey.
It really depends on the amount of financing the banks are willing to extend to buyers that determines issuance success these days. I have come to the knowledge that Oxley bond buyers get financed 75% of their purchase. Lucky for the bank, better lend money to someone to buy the bond than to buy it themselves. 😉
Verdict : Why waste time with 2% for 1 year these days ? Bernanke has just refilled our punch bowls and you can make 2% in an hour in the stock market.
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Yeah, I had a good laughter when I was informed of the IPO this morning. It does not make sense to me from investmenet point of view.
Oversubscribed outsized issue in the end.
There is more money on the sides than we know about. Or perhaps more MYR flowing out of Malaysia into Singapore branches of Malaysian banks ?