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.