Issuer:  Oxley Holdings Limited
Status:  Direct, unconditional, unsubordinated and unsecured                             Notes
Rating: Unrated
Format: Reg S, S274 & 275 of Singapore SFA
Tenure: 3 Years
Initial Price Guidance : 5.15%
Issue Size: SGD [TBD] million
Payment: Semi-annual, actual/365 (fixed)
Details:  SGD250K/MTN Programme/Singapore Law/CDP
Listing: SGX-ST

Credit Highlights:
– Oxley expects to recognize approximately S$2.86bn worth of revenues over the next six years (c.S$2.4bn over the next three years).
– Oxley delivered its most impressive set of results yet, with net profit attributable to shareholders soaring to a record $250.8 million for the three months ended 30 September 2013 (“1QFY14”), compared to $6.6 million reported in the previous corresponding period (“1QFY13”).
– Short investment to sales cycle with projects launched within a year from site purchase. Completion of development projects in relatively short periods.
– Extensive network of partners. Strong relationships with contractors, financiers and consultants help the group bring projects to the market faster than its competitors.
–  Overseas opportunities for its next phase of growth – In November 2013, acquired adjacent parcels of land in London’s Royal Docks area, known as the Royal Wharf. Acquired at a price of £200 million, these sites yield an effective gross area of approximately 363,000 square metres, which Oxley intends to develop into more than 3,000 residential units, along with a mix of commercial, retail, leisure and educational facilities.

So its market cap doubled in a year because its profits rose from 6 mio to 250 mio for the quarter which is MORE THAN CAPITALAND AND CDL COMBINED. (No wonder CDL is complaining)

It is also financially leveraged at 11.3 times which means that for a company of SGD 1.3 bio, they have total assets of 11.3 times ! which is HIGHER THAN UOB BANK and more than >70% higher than HL Finance and Sing Finance.

Why is it ok for a bank to have high financial leverage ? Because they are deposit taking institutions.

So Oxley is funding all their assets with just PURE DEBT which would bring a huge smile to every shareholder’s face. And bondholders BETTER HOPE AND PRAY that their “expects to recognize approximately S$2.86bn worth of revenues over the next six years” is an underwritten statement.

They have grown in a big hurry and are borrowing like mad, with London now their biggest gamble. Already in China, Cambodia and Malaysia, their London foray is their largest gamble to date which they better build and sell fast because of the rubble of looming taxes and credit squeeze that the British government may be hatching.

And another acquisition of a prime freehold site in KL just last week.

This issue will sell as private bankers are getting another nice ang pow to market it and DBS is trying to buy over Soc Gen private bank’s asian unit. Just do not go around asking for bids because I do not think many banks like to buy bonds of companies that borrow more money than them.

Good luck !